“Do not save what is left after spending, but spend what is left after saving.”
– Warren Buffett
Saving money is essential when it comes to building wealth and securing a financial future for yourself. Just as Mr. Buffett (the 4th richest person in the world) stated above, saving money is not something you start once you have purchased your needs/desires, but rather a safety net you consciously create by setting aside a percentage of your income, as soon as you make it. Many wealthy people, including Mr. Buffet, have practiced the great habit of saving money and limiting expenses to grow one’s wealth. Life is full of uncertainties and having a financial safety net is a great proactive approach to better prepare for the unexpected. However, saving money is easier said than done. With costs of living, inflation, selfish desires, and the need for instant gratification saving money can be more difficult than one originally anticipated. But with the right strategies and motivation you can find yourself effortlessly saving money and investing in your future wealth/financial security.
Why Save Now?
For as long as money has existed, people have disagreed on how to make it and where/how to spend it. However, when it comes down to it it’s your money and you can do with it as you please. We are just merely suggesting that if you don’t make saving money a priority now, you probably never will. Just like the person who swears their diet will start Monday and four Monday’s pass with no change in their food consumption. Saving money may not be the easiest or most exciting financial practice but watching your wealth increase seems like a fair trade off. Therefore, implementing money saving strategies now, rather than later, will kickstart your financial security. Today’s society tells us that instant gratification is worth far more than delayed gratification. But let us walk you through how starting to save money now can not only help your financial status but also your mental health and future wealth.
“He who buys what he does not need, steals from himself.”
– Swedish Proverb
Why Save, Not Spend?
We understand you work hard for your money and should be able to spend it as you please. Therefore, we are not suggesting that you cut your needed expenses or begin budgeting your entire income. We simply suggest putting away 10% (or what’s possible) of your income into savings. Putting aside this extra money instead of spending it immediately or having it ready at your disposal can have many beneficial factors. These factors can not only improve your financial health but also your mental/emotional health. Below we have listed just five of many reasons supporting the importance of saving money.
“You must gain control over your money, or the lack of it will it forever control you.”
-Dave Ramsey
# 1: Emergencies
As mentioned previously, life is full of uncertainties. We have no idea of knowing when something unexpected such as, hospitalization, lay-offs, car wrecks, repairs, etc. will occur. Many of these unexpected emergencies require large funds and someone without a savings cushion may find themselves in massive debt because of them. As a matter of fact, even people who budget, but don’t save their money, will often charge emergencies to credit cards/loans creating more debt for themselves. Having a surplus of money stored away for a “rainy day” will help ease the blow when an emergency does occur. Emergencies are never planned for and can cause even more turmoil if the funds are limited. Saving money can help reduce the impact an emergency could have on your financial and mental health.
#2 Limits Debt
Many people feel the burden of debt, this dark cloud that hovers over you constantly until it is paid off. Debt has been the driving factor to many irrational decisions, poor financial choices, and sleepless nights for many people. Debt is a constant dosage of anxiety and stress in one’s life. So, what can we do about it? Saving 10% of your income might not write off all your debt immediately. However, over time your savings will accumulate thus resulting in more financial independence. The more independent you are financially, the less debt you will acquire. For example, using some money from savings to make an extra payment on your home mortgage or car loan will help pay these debts off quicker and avoid spending more money on interest. Saving money can also prevent you from pulling a personal loan when unexpected incidents occur, thus helping you achieve a debt-free lifestyle.
#3 Helps Attain Goals/Dreams
Dream big and work hard. We are told from a young age that you can “be whatever you want to be” and “do whatever you want to do.” Now while this is true, lets take a second look at the most important part of that sentence: work hard. Depending on your job, it may take years to obtain the money needed to reach your goals/dreams. For some, the funds may be out of reach. Whether it be to travel abroad, buy a new car, own a large home, or maybe even start your own business, dreams cost money. If you don’t have a savings, these dreams may seem impossible. But with consistent and regular saving you open the door to many new opportunities. Dreams and goals are made possible when practicing a few conscientious money saving techniques. You will find yourself having to budget your dreams into action rather than acquiring more debt to make these dreams a reality. Hence, the more you save the more you can afford to spend on fulfilling your goals and dreams.
#4 Stressless(ness)
Stressless(ness) is a term we like to use when referring to financial stability. When you are financially secure, you won’t stress over unexpected expenses. When the uncertainties of life hit you will be able to adjust accordingly without much stress or anxiety. In other words, you will have peace of mind over your financial health. When you are stressed about money, you subconsciously worry about debt and ways to pay it off even when you sleep. This can result in restless nights and exhaustion driven work causing your mental health to also suffer. However, if you practice money saving strategies you will be ready to face any uncertainties knowing that you are somewhat prepared. So, we like to think that saving money is essential to living a quality life with a stressless(ness) disposition.
#5 Retirement Ready
For most, working your life away is not ideal. At some point you will be ready/needing to retire. Saving money now is important because it can help implement the skills you will use once retired. Most people who solely depend on a pension don’t develop these skills and therefore use up most of their retirement funds quickly. However, people who decide to save money earlier in life (early savers) will know how to save money and budget a fixed income successfully. Early savers may even qualify for early retirement. Early retirement can kickstart the enjoyments of life and rapidly reap the benefits of saving money. Putting away only 10% of your income each paycheck can help you reach retirement sooner and be better prepared for a more comfortable retired life on a fixed income.
“Don’t tell me where your priorities are. Show me where you spend your money, and I’ll tell you what they are.”
-James W. Frick
Save Now and Spend Worry Free
Hopefully by now you have seen that there are many beneficial reasons to start saving money today. Whether you can put away only 5% of your income or 15% every penny counts. When you have full control over your finances and peace of mind over the uncertainties of life you can sleep better, spend smarter, and reach your dreams faster! Saving money will increase your wealth and help secure your financial independence. Avoiding costs that are unnecessary and investing in your own future is never a bad idea, or at least that’s what the billionaires say. Don’t forget that money is simply a tool to help you achieve what you desire. There are many ways to use this tool in a smart way to help advance your financial freedom today!
“Money is only a tool. It will take you wherever you wish, but it will not replace YOU as the driver.”
-Ayn Rand
Thanks for reading the Business Buddy Blog!
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