Yes! We've all heard about savings and we all know the importance of savings. We all know that we need to save a lot, especially for investment purposes so that we can create more wealth and never run out of money. We know that we ought not to exhaust our whole paycheck on groceries and other valuable amenities we consider necessities for living. But how do we go about saving when it seems like a hard thing to do?
You see, let me start by reminding you why you need to save. That you know that it is good to save money isn't enough motivation to start saving money. So, here's why you should start saving.
1. Saving gives you financial security
Have you ever tried saving some amount of money before? How did it make you feel? Let me guess, you felt rest assured that you had some amount of money you could fall back on easily should an emergency occur, right? Yes. That's the kind of financial security that comes from saving money. Now, imagine how happy and confident you'll be years from now when you must have developed your savings habit and realize that you have so much money in stock somewhere.
Kara Perez, who founded bravely, a resource that aims to empower women by providing them with the tools and education to reach their financial goals, says, “I love saving money because it means financial security. Plain and simple, having money makes your life easier. I save because I want my future self to have the same great lifestyle I have now, and I don’t want to get caught in a financial emergency.”
2. Saving gives you some sort of freedom
When you save, you give yourself the freedom to choose what kind of life you want to live. You are not restricted or forced as a result of your financial capabilities.
Eric Roberge, a certified financial planner and founder of Beyond Your Hammock, a financial planning firm that specializes in giving financial advice to people in their 30s, says, “It has nothing to do with the money and everything to do with giving yourself flexibility and choice in your life. When you have money available in the bank you can do what you want without stress."
As a matter of fact, Roberge suggests labelling your savings account as your “build wealth fund,” or your “freedom fund.”
3. Saving helps you take calculated risks
It's only when you have some extra cash locked somewhere that you can think of taking certain calculated risks like starting a business or considering investment opportunities like real estate, stocks and bonds.
For instance, Matt Becker, a certified financial planner and the founder of Mom and Dad Money, a financial planning practice focused on new parents, says, “When I lost my job three years ago, my wife and I used that as an opportunity to start the businesses we’d been dreaming about, rather than scrambling to find another paycheck as quickly as possible. We could only make that decision because of the years we’d spent building our savings.”
Now that we understand the importance of savings and we know that we ought to save not just because it is good, but because we know the benefits that come with it, let's consider how to go about it.
In this video, we’ll be sharing with you 10 psychological tricks to save a lot of money.
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