There is no harm in spending as much as you want but if you have the means to save a part of your earnings, why not do so? Believe it or not, the importance of saving money is highlighted by future happenings and unexpected situations.
Why Should You Start Saving Money?
For newly employed professionals, their first paycheck is the most memorable. It symbolizes the fruit of their hard work and a step towards financial independence. Having a source of income lets you obtain the financial means to afford everything you want. It is undeniable that affording your desired luxuries is one of the little dreams of each person in the world. Hence, this luxury may also be one of the greatest motivating factors for people to study well and graduate to be able to acquire a good or high-earning job. Despite the beauty of enjoying a luxurious life, it must have its limits. For the Millennials and Gen Zs, there is this saying in Filipino, “deserve mo ‘yan” whenever one contemplates whether to buy something for themselves. Of course, who does not deserve the fruit of your hard work, right? But it is better to have a delayed gratification at times when thinking about your long-term goals and investments.
Still not convinced to start saving money? These three reasons might change your view and emphasize the importance of saving money especially when started at an earlier stage of your life. Here are the best reasons to start building the habit of saving money.
1. Emergencies and Risks
This may be considered as the best reason to highlight the importance of saving money. Accidents, death of a loved ones or illnesses are the unexpected happenings in the life of a person. If you do not have enough money or savings, you will surely resort to applying for loans or debts to answer your emergency needs.
Not only these unfortunate events call for emergency funds. With how Filipinos value their family, it is unavoidable that you help your members who are in need especially during financial troubles or economic crisis like what happened this pandemic. Of course, you are not responsible in times that they lost their job, their business got bankrupt, or other financial problems but family is family, right? Not all can save a portion of their earnings especially for people whose financial capability is just sufficient for their daily needs. People have different privileges. Perhaps, it will not hurt your pocket if you share a bit of your blessings especially to those people in need whether a family member or not.
2. Future Investments, New Interests or Big Purchases
Aside from affording the luxuries in life, there may be a phase in your life in which you want to invest on something bigger or discover a new field of interest. Buying your dream house or affording a car might be the dream of every employee. With this, you need to save up to afford such properties. There may be a lot of financing methods to apply for when buying a real estate like Pag-IBIG or bank loan, but you will be needing to make a down payment to undergo this financing. Also remember that it is not enough to save an amount just for the down payment. You also need to have an allotment for the monthly payments to be prepared for unexpected financial crisis like what is brought by pandemic to many individuals. With many individuals that were retrenched or lost their means to earn, a lot of properties whether real estate or automotive vehicles, were repossessed by financial institutions. The financial drawback of these individuals made them unable to pay the principal and interest which led these institutions to look for a way to recover the money lost from the financing and sustain its cash flows.
Aside from property investments or vehicle purchase, new fields of interest might pique you. You will never know if it in the future you want to study another bachelor’s degree or pursue a new profession. If not, then you can nurture your expertise by taking a master’s or doctorate degree or crash courses. It can also be out of academics or profession. You can try exploring new hobbies or learning sports. If nurturing your intelligence is not your interest, then you may try exploring new places like having a tour to foreign countries to feel a new environment. Indeed, having an appropriate amount of savings opens you to more possibilities and opportunities in life which will give your more satisfaction and excitement.
3. Long-term Financial Security
This might be the most underrated reason often overlooked as young professionals start to earn. Time will come in which retirement will be inevitable. You might have monthly pension from SSS or GSIS, but chances are that it would not be enough to answer your needs especially that it is common for elderly to have medical maintenance aside from their daily needs. If you have savings or any sort of investments, you will have more ways to support yourself financially. In case that you have a spouse and children, you would not want to ask for money from them or make them your retirement plan if you have the means, right? Obtaining care and support from your children may be satisfying as it may seem but often, they will eventually have their own families which have financial needs as well. A good balance between satisfying the luxury of your family and saving up is a must to have enough during your retirement age. In times that you are old and incapable of having a job, you will realize the importance of saving money especially if you have a means.
Remember: No Rules in Saving Money
Saving might not be for everyone especially those minimum wage earners in which their income is just sufficient for their daily needs, no more no less. For them, every peso counts hence the importance of saving money is often overlooked. Although, there may be times in which they will be able to gather a bonus or gain more from other sidelines. Perhaps, a part of it can be allotted as savings. Do not mind even if it is just a small amount like ten, twenty or fifty pesos. It is a matter of building your habit of saving money and being a wise spender and preparing as much as you can for unforeseen events.
For people who have the means to save yet chose to have luxurious lifestyle, this is callout for all of you. It would not hurt if you compromised a bit on your way of life even though it is the fruit of your hard work. Saving is a more matured approach towards financial decisions as you think of the bigger picture instead of focusing on short-term happiness. Filling up your savings account with an appropriate amount would give you a peace of mind in the long run. You will be able to seize more opportunities especially those involving finances like being a business partner, purchasing a good property, or exploring a new interest which will help you grow as a person. We all deserve the best things in life but spending much is not the choice all the time. We only live once so we must be a wise spender. Know when to spend and know when to limit yourself. This is the importance of saving money, to provide a long-term financial security and flexibility.