Is less earning the biggest reason that prevents people from saving money? Not always because your ability to generate surplus depends on how judiciously you spend money. The earning will always appear to be less as compared to your spending if you are unable to control it. Unless you can have some control over spending, no matter how much you earn, it will always be less than your needs. Therefore, if you are serious about saving money, you must first evaluate whether your earning is enough to meet the regular expenses for the necessities. Once you are comfortable in paying your bills, you should be able to save money. The apparent shortage of funds happens from unwise spending that you must control so that you can generate some surplus for saving.
To save money, you must have the right mindset and awareness about why it is important to develop the habit of saving. Only when you work towards it that your financial position will improve, and you would be comfortable to generate surplus money that you can save. There are almost endless ways of saving money provided you can create surplus funds. Some websites preach money saving techniques by declaring that these 99 money saving hacks will never let you down. However, how much you can save depends on your will and wherewithal to generate surplus funds.
Why save money?
If you are wondering whether it is worth the effort to save money especially when the present generation believes in living by the day to make the best of it, then you should know that money-saving should be a priority because it gives peace of mind. When you start saving money, you are more confident about tiding over any unforeseen financial crisis without allowing the stress to get the better of you. You have more options and access to additional funds that help to overcome immediate monetary needs. Savings generates more savings because when the habit grows, it is only a matter of time before you have a large corpus ready to prop up your finances.
Peace of mind
Rarely will you come across someone who has not compromised on sleep thinking about how to arrange for funds to meet some urgent needs. Sometimes you might wake up at the middle of the night scratching your head desperately to figure out how to organize for money to pay the rent that is falling due next week. How long you can keep paying the bills in the event you lose your job is something you might worry about. Money thoughts will never stop bothering you even as age progresses because you would be worrying about kids’ higher education and your retiral savings.
The only way to stop worrying is to start saving early by ensuring that you live within your means and keep away from debts. Having money in your savings account will ensure that you can meet your financial commitments both in the short and long-term with ease and be able to sleep comfortably at night. Money in bank relieves you of financial stresses and gives the opportunity of enjoying life by involving in activities and thoughts that make living more pleasurable.
Have more options
There is a direct link between money and destiny because if you believe in the saying that man is the maker of his destiny then the more money you save better control you will have on your destiny. A classic example is when you are extremely uncomfortable with your job that stresses your life so much that you would like to quit it. When you have money in a bank, you can just put in your papers and take the time to look for a new job without worrying because there is enough fuel to drive you ahead. You can take better care of your life with support from the money that you have saved. Again, when you want to change residence in case you feel unsafe at the present place, you can do it without waiting even for a day.
Paying for healthcare not covered by insurance becomes easy when you have money in the bank because the loss of earning when you are sick for a prolonged period is taken care of by the fund you have accumulated through regular savings. Once again you are at peace with yourself despite the health issues that you leave for the doctors to treat.
While money only offers some more time to deal with the issues because it does not solve the problems, it inevitably increases your odds to tide over the crisis with confidence and some luck.
Make money work for you
Earning more is what everyone should try because it helps to save more but instead of just stashing cash, you must work towards making the saved money work for you. The target should be to keep working less and less as time progresses while making the money work more and even more so that someday you can stop working altogether.
To make money work for you must make money grow in a planned way. In the initial stages when you start saving, the target should be building a healthy corpus even though the interest rate might be quite low as 1% annually without any inflationary cover. Having created an emergency fund that takes cares of your expenses for 6 to 8 months, you should divert your savings into a retirement account with tax advantage. Since the funds like 401(k) and Roth IRA allow you to invest in stock markets doing it rightly could help you earn 8% annual interest in the long run. As you need not pay taxes on these investments, the money grows faster.
With proper planning, those with high income and low expenses can think of accumulating enough to retire in just 10 years. When you have enough money saved, it impacts the quality of life that becomes smoother and more enjoyable as the biggest stress arising from money is now a thing of the past.