There are a variety of reasons why you should start or continue saving money. A clear vision why you need to save money will make this process easier and faster. Here are 4 reasons that may help you to understand why you need to save money.
Make money working for you
You need to save in order to maximize interest rates. When you have saving, your money starts to work for you. You can dig deep into investments, buy property as another stream of income or find your passion that will be your passive income in closest future. Also if you have a high income and low expenses, you might accumulate enough to retire in 8-10 years. The earlier you start, the more time a small amount of money has to grow large through the miracle of compounding.
Everything can happen in our life, so you must be ready to make an important decision despite any circumstances. You could lose your job or get hurt. Health Issues and other unforeseen expenses make our life unexpectable. According to CNN Money, 40 percent of Americans don’t even have an extra $400 available for emergencies. Another reason to increase your emergency fund is the continuing rise in medical costs. Begin saving money right now, do not live for today, live for tomorrow.
Saving for retirement
Our life is too short to make excuses and be poor after retirement. We bet that there is no person in this world who doesn’t want to have at least few thousands of dollars on his bank account after 60. Unfortunately, the reality is often disappointing. But you can always make money work for you, the sooner you start, the less you will have to save in future. Just imagine, you’ve just opened an account with $1, deposited $100 every month for 10 years, and earned a 6.5 percent interest rate or return, you'd have $16,842. Keep it up for another 10 years (20 total) and you'll more than double your money to $49,045. After 30 years of just $100 each month saved, you'd have $110,624 (including compounded interest) from your $36,000 investment. Believe in yourself and start saving today.
The cost of public and private education continues to rise by 5 percent each year. It can be your personal education or your child’s education when the time comes. We live in a fast-paced world, so the “education” term is not all about college degree, it may be any kind of courses, trainings or private lessons. There is always a choice what to learn, it is just a question of how much money you can spend on it.