Friday 29 April 2011

The Importance of Saving

For some reason, many people seem to be resistant to saving money, or just blind to the importance of this. Why do we think itis more important to pay off debts , butit is preparing for the future ? We need to save because we do not always know what the future holds. If you could accurately predict the future and know exactly how much money you need when you need it, it would probably still make matters worse. You should probably make sure you have plenty of time to procrastinate, thinking they'll catch up later today, not saving.

For some reason, many people seem to be resistant to saving money, or just blind to the importance of this. Why do we think itis more important to pay off debts , butit is preparing for the future ? We need to save because we do not always know what the future holds. If you could accurately predict the future and know exactly how much money you need when you need it, it would probably still make matters worse. You should probably make sure you have plenty of time to procrastinate, thinking they'll catch up later today, not saving.

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So, why is it so important to save?

emergencies happen.
They come in all shapes, sizes and prices. Maybe your car will break down. Maybe your roof will spring leak. Maybe your water will spring leak. You may encounter an unexpected medical emergency. You may be the victim of job layoffs. Life happens and emergencies are part of everyone's life. The difference is in how to deal with emergencies. If you are willing to have an emergency savings fund, then you can simply pay for the costs of emergency and get on with your life. If you are not ready then to go into debt (or more likely you are to go further into debt), and wonder why you can not get a break.

One day, you'll want to retire.
The funny thing about retirement is when you stop working, stop getting paid. Perhaps Social Security will still be there for you, and maybe not. It was there for my mother, kind, although I do not know how she was expected to live on $ 600 a month. Your best bet is to save for retirement. If your company offers a 401k plan should take advantage of it - especially if there are adequate resources. If not, then open up the pension fund on its own. Not only will you get a tax deduction for their contributions, but you'll be investing in your future.

a miracle of modern science.
average life expectancy is significantly higher than it was when Social Security was first instituted. With advances in medical science, public education and is now mandated health care, you can expect these numbers to continue to grow. Longer life means more money will be needed for survival and hopefully you'll be able to save enough to do more than just survive!

Children are our future.
If you have kids, I'm sure you have at least thought about college education for them. Education costs rising at frightening rate each year, not only for private schools but public schools, as well. Gone are the days of $ 17 units. Now a college education will cost you your annual salary or more for each year. I highly recommend scholarships and part-time jobs to help defray education costs, but saving money than the education fund is something that also needs to plan for.

Saving is much easier than you think - especially after you get past that first step just the beginning. If not you can guarantee that you will never get out of debt and build wealth, and the earlier you start, the better!

Thursday 28 April 2011