The best thing about saving money is that the minute you make a decision to save a portion of your income -no matter what , all of a sudden you find your income increasing because you become focused..
Saving For The Future
One of the most important and necessary things one can do for one’s financial wellbeing is to start saving.Once the habit is instiled it automatically develops and becomes much easier for a person to save on a regular basis.The excuse that everyone typically has for not saving money is that they don’t have any money to save. They are barely making enough money to pay their bills.Here one should remember that what we make is what we spend. The good news is that what we spend also becomes what we make.
When you are young and earning money on a regular basis, you probably don’t see the need of saving any money. However, if you become injured or ill or if you lose your job, you do not have any income and thus no way of meeting your financial obligations. This is when the importance of saving for the future really sinks home. You do need to prepare for such occurrences and have the resources you need to fall back on in the way of savings.
Most of us are conditioned to earn as much money as we possibly could depending on our capability and once we do earn it we spend it all and enjoy the fruits of our labor. It may sound like a great way to live, but it carries a lot of risk with it.
Also , most people tend to think that with the increased cost of living and family related expenditure it is impossible to save . They also feel that since they are entitled to get pension and other retirement benefits there is no need to curtail necessary expenditure and save. Unfortunately with this kind of thinking you are spending all your earnings or even probably living beyond one’s means. People who make a lot of money but who don’t know how to save are just at a higher level of “ broke”. Money flows through their life, but nothing ever gets retained.
Thereby , Reducing our spending, as opposed to earning more money, is the real key to gaining control of our finances. By saving one is able to build a reserve for the future which pays for large future expenditure like buyng a house, financing a child’s education or going on a long holiday ..
It is advisable to start saving while one is young , even a small amount goes a long way . At a later stage in life it becomes hard to start saving because of the added responsibilities and expenditure and one may be earning just enough to cater to all the needs..
Money saved is money earned and money set aside gives many options and opportunities down the road .
Just to give an example of this …Although one may not think it is worthwhile, but saving as little as $20 a month will add up as you continue to save over a long period of time. As your finances improve you can increase the amount accordingly.
If one were to save $200 each month for a period of five years , it grows into a tidy sum of $ 12,975/ and if saved for a period of 10 years it grows into a sum of $26,170/, and in 30 years it grows into a huge sum of $ 82,810/..Here the interest calculated is a minimum of 3 and a half percent per year componded on a monthly basis..
The best thing about saving money is that the minute you make a decision to save a portion of your income -no matter what , all of a sudden you find your income increasing because you become focused . Just by setting aside an extra $ 50/ per month into a savings account as a starting point for your savings plan, you will either increase your income by 50 dollars or your expenses will drop by 50 doallrs , it is as simple as that .
Making sure that you don’t spend too much and continuing to save on a regular basis is a good way of accumulating wealth. With some simple bank investments your money will double after eleven or twelve years at a modest rate of 6 – 6.5 percent interest.
Saving for the future is also a way of staying out of debt or getting into financial difficulties of any kind . If you want to make a large purchase, you can start saving the money until you have enough to buy it outright rather than have to open a charge account or take out a bank loan on which you have to pay interest.
Just to make it easy to cultivate the saving habit here are some simple money saving techniques that can really help you put money aside for a rainy day.
Setting a goal
What you need to bear in mind is that you dont need to make a fortune , you just need to save a lot more than you spend and accordingly work out a plan.
Start by making a listof all the necessary things you need to do with your money also taking into account 6 months of reserves just in case you are out of work for some reason.Once you have written down and calculated the amount needed , all that is needed is to work out the details as to how much money can be put away each month after all the expenditure and deductions.Making a list of all your expenditure helps yoou in curtailing unnecessary expenditure and you know exactly where your money is going.
Do not get a credit cardunless it is absolutely necessary , as it might tempt you to splurge and overspend.
With some frugal measures like cutting down on dining out , making a list while going out for shopping and buying only what is on the list, making use of coupons , Christmas and discount sales etc, one can really get into the saving habit. Sometimes you can meet your goals by looking for extra ways of making money as well.
A recommended method of saving for the future is to take 10% of the money you earn each month and either deposit this into a separate bank account or invest in a savings plan.
It really makes no difference whatsoever how much money you make in life, if you’re not saving a portion of it for your future needs. All the great wealth builders out there that have built and kept their wealth have been and are great savers..