Top 5 Reasons To Save Finances

Having money to spend after your essential bills is great, but how much of this are you putting aside into a savings account? If the answer is very little or no...

Jun 11,2021 | SHIRLEY

Having money to spend after your essential bills is great, but how much of this are you putting aside into a savings account? If the answer is very little or none, then you’ll want to consider the many benefits of doing so sooner rather than later. Below are 5 great reasons to save your money and help your finances.

Cover an Unexpected Expense

We’ve all been in a position where the unexpected happens, but when it’s a financial emergency or similar, having savings is extremely useful. Not only can you cover the expense, but you can do so quickly and with as little hassle as possible. If you don’t already have an emergency savings fund, it’s a good idea to start building one even if you can only afford a small amount each month. If an unexpected bill comes your way before you’ve built enough savings, a payday loan can still be an ideal option to cover it as you can borrow exactly what you need for the short term and choose affordable repayments. For an emergency savings fund, you should aim to have at least 3 months’ worth of essential outgoings covered just in case.

Build a Deposit for a Property

Many people have a goal to purchase their own home, but to do so they’ll need a considerable deposit saved. With many mortgage providers requiring at least 10% of the value of the property as a down payment, this equates to a considerable amount of cash for the average house price. Being realistic with how much you can save over a number of months will give you a goal to work towards, so if you want to have a large enough deposit in 12 months, for example, you can then work out how much you’ll need to save each month until then. Buying a property is one of the most expensive purchases you’ll ever make, so saving as soon as possible towards it is key.

Avoid Being Overly Reliant on Credit

Having more money put aside means you will be less reliant on borrowing money. The idea of being debt-free to most people is ideal, but many things in life still require a helping hand through a loan or credit card. Reducing your reliance on borrowing money will help to avoid the trap of falling into a cycle of debt. With more savings, you can make purchases without the worry of owing money to a company or finance institution which will lead to paying interest, increasing the amount you owed in the first place. If you can pay for items outright without credit, it will be cheaper for you in the long term.

Enjoy Early Retirement

The dream of early retirement can feel extremely out of reach for some, but your chances of achieving it are considerably increased with having savings. Not only can you put money aside into a standard savings account, but you can also choose to set up a private pension to put money away specifically for retirement. This will then payout alongside any company pensions you have in the future, as well as your state pension when reaching a certain age. If then you manage to save enough over the years into a private pension or similar savings account, you could achieve the goal of retiring earlier than expected.

Have Financial Freedom

The biggest benefit of saving money is to achieve financial freedom. After all, the more money you have accumulated in savings, the less reliance you will have on job earnings or borrowing. Having financial freedom would open the door to working less and spending more time doing things you enjoy. Financial freedom is another situation that many will find hard to accomplish, but having a goal to be financially free starts with savings. Without regularly putting money aside for the future and only spending for the present, it’s not possible – unless you’re fortunate enough to inherit or win substantial sums, which of course will make this easier.

Hopefully, the 5 reasons above are enough to stimulate your savings desire and start to plan for not only the unexpected but also the things in life you really want to achieve.

Finances Reasons