Why Save Money? 6 reasons to stack your coins

Financial stability, business success and insurance conceptAmericans are known for not having good savings habits. “Spend ’til the end” is like a national motto. If you’re someone who doesn’t save money it could be because you don’t see why you should.

There are plenty of reasons to save money starting with:

1- You save your money so that one day your money can save you

We’ve already talked about the importance of an emergency fund. There’s nothing like having cash available to make a serious problem disappear.

There may come a time when you need a large amount of money and can’t use a credit card.

Imagine that you lost your job and your rent is due. Maybe your landlord only accepts cash, checks or money orders. Having cash in the bank will prevent a lot of stress.

There are other situations that you may find yourself in that requires cash. There are some situations where cash is simply the better option. Always remember that credit card bills have to be paid. With interest.

2- It strengthens your wealth building muscle

Saving money is one of the first steps to building wealth. Everyone knows that if you want to become wealthy you should start investing.

Before you start investing, you need to get used to saving first. You need to get used to setting money aside consistently for a purpose.

After you save up and have your emergency fund, then you can start investing. By that time you won’t miss that money coming out of your paycheck every month.

3- It develops discipline for other areas of your life

Consistently saving money towards a goal develops discipline. Your wealth building muscles will grow every month.

That discipline will translate across other areas of your life. As it becomes easier to save money, other good habits will come easier.

It will be easier to push away that first second donut.

It will be easier to say no to other people’s unreasonable demands.

Including your kids.

It will be easier to get up and jog around the block on cold winter mornings. (I can’t guarantee that one.)

What builds up discipline in one area, builds it in other areas.

4- It gives you the freedom to take advantage of opportunities

Imagine that you wanted to get into real estate investing. Maybe you didn’t think you could raise or borrow the cash to get started.

Suppose you started saving money to go towards buying real estate anyway. Let’s pretend that you saved $10,000 in cash. Now imagine if a property suddenly became available for $10,000 for whatever reason.

Saving that money would make it possible for you to make the deal. If you didn’t have it you would be mad that you weren’t in position to take advantage.

Having cash on hand gives you the freedom to take advantage of unexpected opportunities. You never know when a great investment might go on sale for a deep discount.

That goes for real estate, businesses or any type of income producing asset. It also applies to consumer goods.

Just keep setting money aside for when that ‘once-in-a-lifetime’ deal comes around. Do that and you’ll find that ‘once-in-a-lifetime’ deals come around much more often.

5- It decreases your dependence on credit cards

One of the benefits that people often say about credit cards is being able to use them for emergencies. The problem is using them too much can actually cause emergencies.

Always relying on credit cards will put you further into debt. Then more of your cash gets eaten up paying bills.

Then you’re stuck when a problem occurs and you don’t have enough cash to cover it. Save your money so that you can actually choose when to use your credit cards.

6- It makes you seem as less of a risk to banks and other lenders

Are you looking to apply for a mortgage or any other kind of loan anytime soon?

Being able to show a lender that you have a chunk of money saved makes you look good. They will see you as being responsible and disciplined.

They will see you as being on top of your finances. You’ll come across as being more likely to repay your debts in a timely fashion.

Lenders will see you as less of a risk and be more eager to lend you money and charge you less interest.

There are plenty of reasons to save money. Be sure to get started today.

If you can think of other reasons to save money please mention them in the comments below.

 

Comments

  1. Great post!

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