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Guest Post: Why Should You Save for the Future?

Guest Post by our member Nancy 

Why Should You Save for the Future?

In the midst of fast financing options and easy availability for credit cards, savings seem to be suffering big time. After all, people think that all they need to do in order to buy the things they want is simply use their credit cards, and pay off the debt at a later date. So why to save for the future?

This type of mindset is exactly what’s leading the world into the worst financial problems ever. If one takes a look at some of the past recessions and financial disasters the US has ever come across, they will find that most of the times, a huge debt burden was the cause.

The worrying thing is that this type of lifestyle seems to be making people feel comfortable. Of course, it’s only till the real effects of such lifestyle start showing up. At that time, people start realizing the importance of saving for the future, but usually, it gets too late by then.

The below given are some of the important reasons why one should save for their future, despite having many options to obtain credit easily.

Financial independence

How do you define richness? I know most of you would probably say something related to measuring it in terms of money, but that’s far from being the true measurement of richness. Being rich, in the real sense, is being financial independent.

Most of the people nowadays rely heavily on their paycheck and quite a lot of them even live from paycheck to paycheck. For such people, all it would take is a recession to end up in the worst imaginable financially situation of their life.

However, those who have sufficient amount of savings to look forward would hardly have a cause to worry about even during financially challenging times, simply because they aren’t relying completely on their job, business, or whatever. Being financially stable even when your primary source of income suffers is, to a certain extent, financial independence.

After all, we see so many cases of people having to work even after their retirement because they have to, and not because they want to. The reason is living a financially dependent life on their paychecks, and not being able to change their financial status even after retiring.

On the other hand, being able to change your job according to your desire without having to worry about the lower salary, as well as starting a small business and following your passion by leaving your job anytime you want, are some of the benefits of being financially independent.

Reducing expenses to a considerable extent

If the statistics are anything to go buy, those who use credit cards to pay off all their expenses end up spending 50% more than those who use cash. The reason is that usually, most of the people never manage to clear off all their debt in full every month. This leads to having to pay a considerable amount as interest on their spending, which leads to making the things they buy at least 50% more expensive for them. One obviously wouldn’t have to spend 50% extra if they used cash to pay off their expenses.

On the other hand, having a good amount of cash reserves to take care of regular expenses may actually help one save a lot of money on their grocery and other such bills. This is due to the fact that they will be able to take advantage of the sales and other such discount offers when they have a considerable amount of savings, to buy things they need regularly in bulk.

Getting out of debt

Savings help one get out of debt quickly and easily anytime they want. Why would anyone want to do that, you might ask? Well, there might be various reasons. For an example, one may be able to foresee the financially challenging times setting in, and might want to clear off all their debt in order to be financially safe during such times.

Similarly, one might even want to pay off their debt when they feel that they may no longer be able to earn as much as they used to, and hence can’t pay off the monthly EMIs or other such loan repayment payments.

A final word

Savings help in all walks of life. Nowadays, as times keep getting more and more challenging financially, savings seem to be more important than ever.