With credit so easily available, the practice of saving money among people is gradually perishing. If you need something, all you need to do is swipe a plastic card, and then pay it back over God alone knows for how long. People have started living like there is no tomorrow. However, the daunting truth is that whether or not we like it tomorrow exists and a financial emergency can hit you at any given point of time. With the concept of zero percent EMI’s doing the rounds of the market, people’s perception of their purchasing power has falsely inflamed. To put in simple terms, people think they can afford more and more when they actually cannot. This kind of perception sets revolutionary grounds for success for all marketers worldwide however it is monetarily risky for the others.
Here are a few reasons why you should start reducing your dependency on credit and start saving money right from today.
Have you ever wondered that what will you do if your house or your car needs major repairs? What will you do if a medical emergency hits your family beyond your anticipation and the coverage of your insurance policy? Think about it, can you really depend on the banks to lend you money for everything. It is always wise to save a good percentage of your income and be worst case scenario ready. You must have some rough weather money to get you through rough patches of life. This is why saving money is extremely essential.
The core objective of saving money is that we save money to accumulate money to be able to use it for our future requirements. Today you are working and probably far from retirement. However once you retire, irrespective of whether or not you chose to work post-retirement, a fixed, regular salary will stop crediting in your bank account like it happens today. This is why you need to save big enough corpus to secure your financial freedom in your post-retirement life. Depending on banks or your children to take care of you is not the attitude that you should fuel. This is definitely not the right approach. Saving and investing is a healthy habit that you should enforce right from the start of your working life.
Enjoy a Good Lifestyle
Did you know that happiness can come from being organized? You don’t have control over a lot of things that might happen in the future. Hence organizing and taking control of your future by saving a good corpus for dealing with future financial affairs is a good decision. Ask yourself this question would you like to live a hand to mouth life or a pay cheque to pay cheque life? People who don’t plan their finances for their future often have to run from crisis to crisis, and that is a stressful life. The key to lead a good lifestyle today and tomorrow is to save money adequately. You have nothing to lose if you save money, only to gain a good lifestyle.
Getting Out of Debt
The only way to get out of debt is to save money. It sounds ironic, but it’s true. You will never be able to pay off your credit card bills if you keep using your credit cards for every emergency you are faced with. Before you start using your credit cards aggressively, you must build an emergency fund and start paying for unforeseen expenses out of that fund so that eventually your credit card gets paid off. This will keep your spending in control and increase your credit score. If you save money, you will be able to use more credit should you hit a massive emergency or adverse contingency.
Dealing with Emergencies
No matter how much we hope that the emergencies won’t happen, we know that they will. You or your loved one may face a medical emergency, you may need to make an emergency trip, you may be faced with a natural calamity like a flood, or you may have a car accident. Any of such emergencies are likely to be expensive. We all know at some point each one of us is destined to face one or another emergency. Hence it’s wise to be financially prepared for such an emergency instead of potentially becoming another victim of an emergency.
All of are faced with annual expenses such as vacations, vehicle maintenance, fixing appliances, home repairs, property taxes, and income tax. If you want to have a stress-free financial life, then you must save money to incur annual expenses. You may be tempted to keep paying for your expenses with your credit card without actually paying them off, however, whether you like it or not this is very dangerous for your financial health. The best way to manage annual expenses and to gift yourself peace of mind is to save money in advance.
Become Financially Independent
Living hand to mouth, or paycheque to paycheque, basically means that you work because you have to and to make ends meet. Well is that the kind of life each one of us imagines. If you don’t save your fair weather money for the rough patch of life, you will be leading a life that depends on monthly paycheques. You must save money and have sufficient funds to look beyond such a stressful life. If you save money, it will give you financial freedom or in other terms make you financially independent. Financial independence will give you the freedom to make choices separate from just earning a fixed paycheque, such as taking a vacation anytime you want, leaving work and going back to school, switch careers, starting your own business, extending help to family members and retiring whenever you want to. Not having to depend on anyone for anything is a great feeling and a wise way of leading your life.
People say that money cannot buy happiness. However, money can reduce your roadblock, reduce your struggle and set grounds for happiness for sure.