The Importance of Saving Money
Here are a few motives why we save…
Regular Life Expectancy – With more advances in medicine and public health, people are now living longer and needing more money to get by.
Emergency cushion – This could be any number of things: a new roof for your house, out-of-pocket medical expenses, or sudden loss of income. You will need money set aside for these emergencies to avoid going into debt to pay for your necessities.
Education – The costs for private and public education are rising every year and it’s getting tougher to meet these demands.
Retirement – If you intend to retire someday, you will probably need savings and/or investments to take the place of the income you’ll no longer get from your job. Volatility of
Social Security – Social Security was never intended to be the primary source of income and should be treated as a supplement to income.
How much can you potentially save?
It’s important that you develop a budget using your net income as it reflects your take home pay after taxes and dedications. A common mistake people make is developing a budget off of their gross income. It’s a mistake because you’re budgeting money you never possessed. Remember your potential savings is the difference between your net income and your expenses.
Tips for saving money:
Try stinginess – Purc Save windfall income – Any unexpected money such as income tax return money.
hase cheaper off brand items and save money.
Collect loose change and deposit it in the bank – Use a piggy bank and deposit its contents when its full.
Save lunch money – According to a study by Forbes Magazine, Americans on average spend $1000 annually on going out to lunch. Bring your lunch to work and invest that $1000 in yourself.
Break a habit – Try doing one less thing you expensive venture a week and apply that money to your savings.
Have a “buy nothing week”.
Use coupons – Coupons are a great way to reduce living expenses.
Compare costs of major items before purchasing anything – Do your due diligence, shop around before making major purchases.
Save windfall income – Any unexpected money such as income tax return money.