Thursday, April 23, 2009

Important to Save Money

Why it is important to save money? Let's count the reasons and how to do it

Way back in the day, saving money was as American as apple pie. After the Great Depression, as times and circumstances began to change for the better, just about everyone was into saving money, for those 'rainy day' needs. People in this country went through some very hard times during the depression and certainly learned their lesson. When you were lucky to have a job and could barely make ends meet, there was no money left over for emergencies and certainly not for luxuries. So when the economy picked up, most people were prudent enough to regularly put some money aside for their savings.

It must be a cyclic thing, because today, very few people have a savings account, now accustomed to relying on credit cards to meet emergencies and to fund luxury purchases. However, things are changing now. More and more people realize that it's important to save money. Why? Let's take a look at some of the situations that might arise at any time and throw you for a loop.

For one thing, credit is getting tighter and it's no longer wise to count on your credit card limits. What do you do if you're laid off? Your income is curtailed sharply, assuming you qualify for unemployment. Of course, this is just the time your car tires are in dire need of replacement. If you'd known that it's important to save money, there would be no problem. Now, those credit cards might get maxed out. Now is the time to pay those credit cards down and set aside as much as you can afford in savings.

If you live paycheck to paycheck (join the club!) and do not yet realize why it's important to save money, consider this scenario: you don't have health insurance and you develop a terrible toothache.

You're a student, living away from home, going to school and working. You need your car to get to work and school. It breaks. What do you do? Your parents may not be able to afford to pay for the repair. Auto shops do not usually have payment plans! No what?

You require eyeglasses in order to drive. You lose them. You don't have vision insurance and don't have a savings account. Your credit cards are maxed out.

Each of these scenarios will turn into a gigantic hassle. These are just a few of the reasons it's so important to save money.

That said, how do you begin to save money for that rainy day that turns into a downpour? No matter how small of an amount you can afford to set aside, now that you know it's indeed important to save money, you want to get started.

So what's the best way to save money? The answer, in a word, is consistency. Most people can afford to set aside $15 a week. Even if you're working a minimum wage job, this much can be done. In a year's time, this amounts to $780. Not bad. Cut costs as you can, if necessary. For example, most magazines cost between $5-10. A stop at the pizza shop? There's $12-15, easily. You see that at the minimum expense for just these two items, you can exceed your weekly savings goal.

So many of these little inconsequential expenditures are more desire driven than necessary. Become conscious of these impulse purchases. Once you commit to a weekly savings amount, stick to it! Now that you understand why it's important to save money, make your savings goal realistic and start saving. Believe me, you'll be glad you did.
Read More... Tips on How to Save Money


joe said...
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Unknown said...
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