Saving money is one of the best financial habits you can adopt. Without keeping your finances organized, it’s easy to find yourself in debt for various reasons, from loans to excessive credit card use. In a recent study from Lantern by SoFi on “Credit Card Use and Sentiment in the US,” they found that 58% of people have at least two credit cards and 38% of their respondents use credit cards to pay for over 75% of their expenses. There’s no denying that debt is a nationwide issue and can be difficult to tackle. Fortunately, though, there are many ways to reduce expenses, build up savings, and become debt-free.
1. Importance of Saving Money
Saving money can help you be prepared in case of an emergency but it can also help you achieve your financial goals faster. In case you need a bit of motivation to start saving, just think of it this way: by saving money aside, you get to fund large purchases, avoid debt, reduce your financial stress, leave a financial legacy, and gain a greater sense of financial freedom. Besides reducing financial stress, savings provide us with many benefits that can enhance our quality of life.
Freedom to pursue your dreams
Far too many people across the globe are stuck doing jobs they don’t enjoy doing. Your savings could help you pursue your dream job and live the life you dream of. When you have ample cash sitting in your savings account, you can be brave enough to end a situation you hate being in. Savings allow you to quit a job you hate and give you the courage to pursue your dreams.
Saving for fun
Many people mistakenly think you have to make a choice between saving money and having fun, but this is a poisonous mentality. Fun is a critical part of financial wellbeing, in fact, it is essential for your overall well-being. Saving money gives you the freedom to do what you want, guilt-free, and without worrying that you are harming the financial future of your business. The fun part is what gives you the motivation to persevere.
Saving for emergencies
Emergencies are an inevitable part of life. When Murphy knocks on your door, money is the last thing you need to be worrying about in an emergency. Having a decent amount of money saved up keeps financial stress from being added to an already stressful situation.
Being able to help others
When your money grows, your opportunity to help others grows with it. Whether you will choose to financially help someone in need or just give them the gift of your time and effort, the feeling you gain in return is like no other.
You won’t be around forever so make sure you leave a legacy of financial fortitude, wisdom, and honor behind as opposed to debt. Your legacy is a testament to love for your loved ones.
2. Simple Ways To Save Money
Even if you are living month-to-month, you can make some simple adjustments to change your path. No matter how much money you make, limiting financial waste will always leave you better off. When you save more money, you have more money to invest. And even Warren Buffet knows that every penny saved is more than a penny earned thanks to the magic of compounding.
Identify where you can save
The best way to identify where you can cut back is by tracking your expenses and seeing where is your money going. For example, perhaps you are paying too much for your utilities. You can compare electric providers to find a more affordable rate. Since this is a monthly bill, the savings can add up over time. Just by making a few tweaks to your energy usage home such as fixing leaky pipes, washing your clothes in cold tap water, and installing LED lightbulbs can also dramatically reduce your electricity bill. Even small changes can make a big difference.
Ask for discounts
If you don’t ask, you’ll never know. Call the customer service department of a provider you make regular payments to such as cell phone carriers, trash service, electricity, and gas providers. Thank them for their wonderful service and politely ask for a discount.
Experiment with $0 entertainment budget
There are plenty of ways to have fun for free such as taking a bike ride or hiking, building a fort out of couch cushions, playing a board game, doing a puzzle, or just meditating. You can even skip the gym and work along with a free YouTube exercise video.
Saving money is important for everyone, even the wealthy. It provides us with security, stress relief, and freedom. While there are countless reasons to save, you need to find a reason that resonates with you, whether it’s helping others, improving your finances, leaving a positive financial legacy, or just having a little more fun. The secret is not to forget to think outside the box. Everyone’s spending habits are different, so it’s likely you’ll have some special circumstances in your life that could help you brainstorm more ways to save.