Conventional wisdom dictates that, throughout your life, you should always try and save as much money as possible. Although the question in the title might, therefore, sound like a stupid one, to many people it is not. After all, why should you spend your life saving your hard earned money? You cannot take it to the grave with you!
Undoubtedly, the spenders amongst the readership will agree with the latter statement. And, although I would love to agree, too, I cannot. Why? Because saving is an essential part of life, and here are a few reasons why.
Part of being a child is depending on other people for everything. As a kid, there is nothing wrong with that because you don’t have the ability to look after yourself. As an adult, however, it becomes a problem. There comes a point in your life where you need to cut the cord from your parents and go out on your own. Gaining financial independence is one of the only ways you will be able to maintain your lifestyle without asking your mum and dad for help. Simply put, saving up is part of becoming an adult.
Get Out Of Debt
As you attempt to become financially independent, you might make a couple of mistakes along the way. From a financial point of view, mistakes are not a good thing as they often leave you in some form of debt. If you don’t deal with that debt from the beginning, it can pile up and become a problem. To deal with it organically, you have to save money. Otherwise, you are just adding to a never ending cycle.
Buy A House
Can’t you get a mortgage to buy a house? Yes, you can and you most probably will when it comes time. Still, they don’t hand out the full amount without some assurances. Those assurances come in the form of a down payment, typically ten percent of the full amount of the loan. The down payment shows them you have the ability to keep up with the monthly payments. So, to get that ten percent, you are going to need to save a lot of cash!
Budgeting for the future is commendable, but even that is often short-sighted. It is short-sighted because expenses will come out of the blue without any warning. If you have budgeted your last dollar, how are you going to pay for the emergency situation? A nest egg is a perfect way to ensure you don’t leave yourself in a tight spot in the future.
Once you finish work, you are restricted to the amount of ways you can earn some money. And, retirement can be expensive because nothing much changes. You still have to pay bills and buy food. The only difference now is your budget has shrunk. Again, a nest egg is the perfect way to get you through any hard times after your career is finished. Savings and a transition to retirement calculator will allow you to enjoy your old age in peace.
Even though that might be a lifetime away, it is still worth thinking about!