Why Save Money, Even When Borrowing is Cheap & Easy
Credit so easy to access, why save money and buy with cash? If you want something, you pull out the plastic and then pay it back who knows for how long. If you can afford the monthly payments, everyone does that; what’s the big deal? The unfortunate thing is that this sort of thinking is making sense to too many people these days.
Here are reasons why you should save:
> Financial Independence – The notion of “being rich or wealthy” means to most people is having financial independence and savings to depend on. Calling your own shots, financially speaking, means having the freedom to make choices in your life separate from earning a pay cheque.
> Save on Everything Bought, (Groceries, Home, Car) – With savings, you can practically buy everything with cash on hand, this means, you save up on credit and mortgage interests. You can also prioritize where you funds are going, and learn to appreciate how it feels to be debt-free.
> Get Out of Debt – Once you saved up, paying of old debts will unburden you with unnecessary stress and depression of paying off.
> Annual & Unforeseen Expenditures, Emergencies – Funds for family needs, education, vacations, vehicle and house repairs, and other emergency concerns that requires cash out.
> Losing a Job or Inability to Work due to Ailments – Having buffer funds in cases that you are suddenly out of job or an ailment requires you to stay home. Savings will keep you afloat until such time that you are back on your feet. Any of these things can happen to you. Employment Insurance (EI) doesn’t kick in until you have been unemployed for 6 weeks. Do you have enough savings to tie you over or will you be living on credit? Living on credit during a time like this can quickly make a bad situation worse.
> To Have a Good Life – There are huge emotional, psychological and physical consequences to always living stressfully, from hand to mouth, pay cheque to pay cheque. People who don’t plan for their future seem to run from “crisis” to “crisis.”
Being organized isn’t going to make you happy all by itself, but it can sure help. There’s so much in your future that you cannot control, putting aside funds to spend when you need it is actually organizing and taking control of your future and financial affairs.
Start Your Emergency Savings Fund Right Away!
Start today by setting aside a little money each pay cheque until you have an emergency savings fund of $500 to $1,000. If you receive a bonus from work or an income tax refund, use that to get you started or to add to what you’ve already got set aside. As life happens and you need to dip into your fund, build it back up. It takes a bit of work, but it’s a habit worth getting in to.