Why Should We Save?
With savings rates at rock bottom levels, and with no recovery on the horizon, you would be forgiven for not having any motivation to save. Of course, for some the problem isnât motivation but necessity. For those who are living on low incomes, saving is simply a luxury that they canât afford. So why should we save? Whatâs the point in putting our money away; why not spend it while weâve got it?
Not everyone has savings, and how you conduct your finances is, of course, up to you. However, putting a little money away each month can help you if any unexpected expenses crop up. Emergency funds are really important if you want to avoid getting into debt, or if you donât want to add to the debts you already have. What if your car broke down tomorrow, or if your toaster blew up? Would you have the funds available to repair/replace them today? Or would you have to borrow to make it to the end of the month?
For the Future
Saving for retirement is probably the last thing on your list of priorities, but even putting a small amount away each month could help you out in the future. Choosing a pension or inflation-beating (if you can find one) savings account to put your money in will help you to maximise the return on your savings, meaning that theyâll hopefully grow with you.
Think of something youâve always wanted to do or somewhere youâve always wanted to go. Could you afford to do this thing right now? It probably wouldnât be possible to pursue your life goals with your current disposable income, so why not save so you can do the things you want to do? Start small â even just putting pennies into a jar will be a good start.
For Annual Events
Every Christmas, millions of families struggle to keep the costs down and some are even still paying off their festive debts well into the next year. Christmas, birthdays and other holidays are never a surprise; most come around on the same date every year, and the ones that donât are listed for years in advance online. There really is no excuse for not being prepared; even just Â£5 per month will give you a head start.
For Peace of Mind
Having a bit of money put away for a rainy day could really give you a mental boost. When youâre living payday to payday, all it would take is an illness or a broken appliance and your whole budget could go out of the window. The worry this can cause can affect you in more ways than you think. Having money troubles has actually been found to lower your IQ points, as itâs hard to process information when youâre spending time worrying about the state of your bank account. Putting some money away for times when you really, really need it is a great way to put your mind at ease.
Coral Pearce-Mariner regularly writes finance related articles for a number of blogs and websites. She recently published one titled Are You Using Payday Loans to Cover the Cost of Fuel? â Check it out.