Learning how to save money is an important life lesson which gives us a number of benefits throughout our lives by helping us gain financial freedom. While we all know that saving money is imperative; however, most of us are unable to save our hard-earned salaries as the idea of stashing away your cash doesn’t offer the sense of gratification which spending does.

Simply put, saving is essentially setting aside money for future emergencies or purchases. From an economic point of view, saving is consuming less today so that you are able to consume more in the future. However, having a safety net of savings has several other benefits as well, like being financially independent, being debt-free, and much more. 

You can start saving money by putting away as little as Rs 500 a week, and end up collecting over 25 grand across 52 weeks! That more than enough to help you buy the latest phone or take a short vacation. But, saving requires financial discipline, planning and being mindful about purchasing things. By creating a budget and following it prudently, we can reduce our living expenses and start saving more.

Reasons Why You Should Save Money

  1. Financial independence
  2. Living debt-free
  3. Unforeseen expenses
  4. Buying a home
  5. Buying a car or other big-ticket purchase
  6. Medical emergencies
  7. Planning your retirement
  8. Building a college fund for your children
  9. Travelling
  10. Investment
  11. Living worry-free

Here are some of the top reasons why you should saving money today: 

  •   Financial independence

One of the most important reasons to save money is to gain financial freedom. This means not being completely dependent on your monthly paycheque to sustain your current lifestyle. If you have enough savings to fall back on, you can take major life decisions without worrying; whether it is changing your job, planning a vacation, getting married starting your own business, or even retiring when you want to rather than working because you have to. You can take these major life decisions without taking any stress if you are financially independent.

  • Living debt-free

If you want to get out of debt, you need to save money every month regularly. Relying on credit cards for all your expenses could land you in some serious trouble. You need to have some funds stashed away to pay off your credit card bills every month, and not incur high penalties in the form of late fees or charges.

You can rely on your credit card for monthly expenses, but it is essential to pay them off every month on time, instead of collecting debt in the long run. By relying on your savings to make these peripheral expenses, you can save a lot of money by avoiding the use of your credit card and living a debt-free for life. 

  • Unforeseen expenses

We all have unexpected expenses knocking on our doors at all time; it could be a health issue, car trouble, house repairs, or even a family event. If you have some savings in your bank account, you will be able to manage these unforeseen expenses much more prudently. It is always better to be prepared for these expenses and have some savings to fall back on in.

You need to have some money in an emergency fund, which can be used when unexpected things come up, rather than borrowing money from friends or family. Building an emergency fund regularly can also help in maintaining your budget and keep a check on your monthly spending. 

  • Buying a home

One of the most significant financial decisions that a person makes is buying a house of their own. However, even if you are planning to take a home loan, you need to pay a part of the price as the down payment. This can be anywhere 10-20% of the total purchase price, and only then banks will consider lending you the remaining amount. You will be able to pay this only if you have saved enough money. Further, if you are able to a part of, or the entire amount, yourself, you will also save a lot on the interest amount on the home loan, and use that money for moving, repairs or decor. 

  • Buying a car or other big-ticket purchase 

For buying a new car, or any other expensive item, you need to have some funds set aside. By saving money, you don’t have to work for years to pay off the high-interest rates for buying a new car. Ideally, you should first save some money and then plan your expense. Also, by paying upfront, you can get more discounts on automobiles and other items, and negotiate better as well. You will free from a monthly EMI scheme which can become burdensome on your finances in the long-run. 

  • Medical emergencies 

Whether we like it or not, life does give us unpleasant surprises in the form of health scares and medical emergencies. Ideally, you should create an emergency fund which is specifically meant for dealing with medical and related expenses. Make sure not to spend that money on anything else, but only on critical emergencies. Illnesses can happen anytime, and it is always better to be prepared for it, rather than worrying about the money later or compromising on the quality of treatment by not having enough funds. 

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  • Planning your retirement

Gone are the days when people retired only after 60. Today’s generation wants to work hard for a few years and save enough money to retire early and enjoy their life. Thus, saving money and building a nest egg, you can ensure that you retire when you want. Set a target, work hard to achieve that number and then take a call on whether you want to work or do something else in life.  

  • Building a college fund for your children

Higher education is becoming very expensive, and if you plan to support your kids through college, you should start a savings fund for them. Saving for college is very expensive; however, it isn’t impossible, especially if you start early when your kids are still young. Additionally, this is also a meaningful way to teach your kids to save. They can also contribute to their college fund by taking part-time jobs, as well as applying for scholarships, and taking work-study opportunities. 

  • Travelling

Travelling is a way to learn about new cultures, food, and helps people distress as well. Most of us want to travel the world; however, a vacation to the US, Australia or Europe costs several lakhs of rupees. It can be furthermore expensive if you like living in luxury hotels or travel extensively. Saving money to travel is one of the best things you can do. If you already have a destination in mind, it is vital to estimate the cost of travel that you are planning to do and save money accordingly.

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  • Investment

Economists believe that you should make your money work for you. By putting your money in a savings account, bank FD, or a monthly SIP; you can make your money grow by getting higher returns. By investing in long term plans, policies, and schemes, you beat the rising costs of inflation effortlessly. Cutting down on unnecessary expenses and creating a monthly saving plan can help you earn higher interest as well as an additional interest income on your salary. 

  • Living worry-free

Last, but far from least, is to enable you to live a worry-free life. If you don’t want to compromise on your life choices continually, it is best to build a savings fund and contribute to it regularly. The importance of saving money is simple; it allows you to enjoy greater security in life. In case you have some money set aside, you will have something to fall back on in hard times. If you have money set aside for discretionary expenses, you will be able to take more risks, like start a new business, or take a break if you want. You can live your life stress-free if you don’t have to worry about money all the time.

Saving money instead of spending it is easier said than done. However, having some savings stashed away can give you unparallel confidence in making smart life decisions. If you haven’t inculcated a habit of saving a part of your salary yet, start with small steps and set up a weekly or monthly saving plan. Cut down on unnecessary expenses and make wiser spending choices to add more to your bank balance. By having a clear goal or purpose, you can save more. Look for reliable and reputable saving schemes from banks that offer a higher interest rate and contribute towards the same regularly. 

At the end of the day, getting started on the journey to save money will enable you to have a good lifestyle. You will be able to choose the job you want or have an option to start your businesses, buy your dream home, or travel the world. By saving money, you can open up new avenues in life, which otherwise would be difficult, or even, impossible. Financial independence is a must for living worry-free. So don’t wait for things to get tough and start saving today.