The Importance Of Saving Money
Some of the reasons why saving money is important are as follows:
Emergency Funds: In order to tackle emergencies in a proper manner, you need to have a substantial amount of money that you have saved over a period of time. These emergencies could include any number of things like building a new roof, unexpected medical expenses, sudden layoff leading to loss of steady income, etc.
Improvement in life expectancy: As medicines and public health facilities improve, the average life …show more content…
Social security, at best, can be a small part of your additional income and in no way should you depend on it entirely for your daily expenses. If at any time, social security plans are withdrawn, you will be left with no source of income and that can become a major hurdle in your financial independence.
Education and other expenses: The cost of both private and public education is increasing every single year. Not just that, many daily needs are also becoming more expensive. So in order to live a comfortable life, it is of utmost necessity that you save money at every stage possible.
Investment plans are one of the best ways that can help you save money in an easy and simple manner. Further, it becomes much easier to manage your investments when individuals are in the habit to save on a regular basis. It is, therefore, important to balance both your personal income and expenditure on a monthly basis before you can invest your money in a proper manner. Some steps, that you can follow to save money in a better manner, …show more content…
Credit card companies charge a huge interest along with principal investments. When you pay off your credit card debts in time, you ensure that you save money that you would otherwise have spent on paying off the interests.
Save some part of your salary every month for emergencies
Emergencies often come unannounced. When you save money every month for unexpected emergencies, it ensures that it does not create a huge dent in your financial resources. A good idea to save these funds is through a savings account or a money-market mutual fund.
Invest in education, pension and retirement insurance plans
Investing in insurance plans ensures that you get life cover, education cover and retirement cover. Not only do you get tax exceptions, you also ensure good return when you require money the most.
Invest in a diversified investment program or systematic investment plan
If you do not mind taking risks, investing in equity based mutual fund is a good idea. Otherwise, you can invest in bonds and other safe securities. Keep in mind your objectives before you decide to invest in a particular investment plan.
Invest in life insurance