Why to save money now? In short, it’s that life is unpredictable. It’s the most exciting, and unnerving part of being human. We don’t know what is coming around the corner. We could meet someone, and suddenly want to start planning for a wedding. Or get injured, and need a rainy day fund for those emergency room bills.
We don’t really know what life holds, but we can still plan for it. We need to save money for life’s unpredictabilities, for those moments we don’t see coming.
Why to Save Money As Soon As Possible
Everyone needs to start saving money as soon as possible because we’re all going to need it at some point. This doesn’t mean only saving for an emergency. You should also be saving money to prepare for major future expenses. Below are 5 reasons why to save money today.
1. Emergencies Will Pop Up
We cannot avoid encountering emergencies. Your dog will eat Advil and the vet will charge $1,000 to detox them. Your roof will start leaking and you will need an immediate, and expensive, repair. Your kid will be playing baseball and accidentally shatter the neighbor’s car window.
Saving for a ‘rainy day’ can help ease the stress of those experiences. Having money tucked away will give you peace of mind. Start by saving $1,000 as fast as possible, and then slowly save until you have a year’s worth of expenses accounted for. That way, you’re prepared for almost anything.
2. Jobs are Not Stable
While short term emergencies are important to save for, you also want to consider the current, unstable job environment as another reason to have a bulked up emergency fund.
You might hit a rough patch in your career or the economy might tank, and you find yourself out of a job. You might also want to try your hand at freelancing. If you’re out of a job, having a year of expenses saved up gives you a year to find another job. If you decide to leave the traditional job market, having a year’s worth of expenses saved up allows you to cover the months where you’re barely scraping by. All of this is why to save money while you still have an income source.
3. Prepare for Major Future Expenses
Another reason why to save money is to prep for expenses that you know are coming down the pipeline. Things like:
- Going back to college
- Buying a house
- Getting that new couch you want
- Saving up for that kitchen redesign
- Grabbing that new iPhone you’ve been ogling
These are things that people often put on credit cards and then end up paying interest on for years. Having the money saved up can actually save you even more money in the long run by avoiding interest. Plus, it allows you to live a less stressful life, since no one actually likes debt.
4. Make your Dreams Happen
Saving money also allows you to chase big dreams. Money gives you options to make living your best life possible.
Let’s say you want to start a family. According to a study by Smart Asset, the average child costs $250,000 for their first 18 years. And it costs around $15,000 for a child in their first year. If having kids is something you want for your life, saving up to make that dream happen is an important part of planning for it.
Or, you might want to take some time off, become a digital nomad, and travel the world. While there are ways to travel on a budget,– it still costs money.
5. Get Old and Look Cute in a Rocking Chair (Retire)
Another reason why to save money is retirement. Retirement looks different for many people. For you, it could be at the end of a ripe career, sitting on a porch sipping lemonade. For someone else, the experience could look like a nomadic lifestyle in a travel trailer. One thing is certain- you will need to save money for retirement (and a lot of it) so you should start now.
How to Start Saving Money Now
Saving money can be intimidating, so start small. You want to set achievable goals. Below are a few options to start saving money today.
Round up purchases to the nearest dollar
There are several apps that can do this, but I have personally used Acorns before. It’s a cool little app that connects to your bank. When you make a purchase, it rounds up to the nearest dollar and moves that money to an investment portfolio that you select. It won’t save a ton of money for you, but it’s a great place to start automatically saving if you’re feeling overwhelmed.
Save all of the $5 bills you get from your tips at work
Another great way to save money if you work in a service industry is to save all of the $5 bills from your tip money. When your shift is over, drop by an ATM and deposit the money into your savings account. After a few months, you could have an extra $100 or more saved.
Use an app to help save you money
Apps can be great to create savings where you wouldn’t have had them before. Check out this list of the 6 apps I use to save money every day.
Starting small gives you the confidence to create bigger savings goals like opening a retirement account or starting that vacation fund. It’s okay to start small. A little goes a long way when it comes to saving habits and you don’t need to do everything at once!
Why to Save Money for Financial Freedom
Ultimately, there are many reasons why to save money, but saving money to buy yourself financial freedom is top of our list and here’s why:
Financial Freedom Gives You Control
Money means control because you have the freedom to do what you want instead of working constantly. You can choose what jobs you take and what experiences you have. It opens a whole new world to you when you have money in savings.
Taking Back your Life
You can start to take back your life as Vicki Robin would say. The more money you have, the more control you have over your life. You can pay off debt and then funnel that money into another savings goal. You can decide what fun things you want to do and prepare for the future. You can’t do any of that without saving money.
Pursue Financial Independence
By saving money you can start to pursue financial independence. Financial independence is the ability to be fully self-sufficient for the rest of your life and not to need to rely on a job to make ends meet. It’s when you save enough that you could retire at any age and be fine.
Financial independence gives you the ability to map out your life and create something meaningful and worthwhile that doesn’t need to be work-related (But it can be if work is your passion) Saving allows you to dream about another life. That’s what pursuing financial independence gives you (and that’s another reason why to save money).
Why to Save Money? To Create the Life You Want
Breaking the paycheck to paycheck cycle allows you to prepare for the future and start creating the life you want. And living your best life (the one you want) is really the answer to why to save money. Take a moment today and set up an automated savings mechanism to get started on your financial journey. If you have questions about how to do this, send me a DM or comment below.