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Saving Money: When And Why

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We live in an age of new concepts. Regardless, the same rule you were probably taught by your parents or grandparents should still apply. 

Always be thrifty (you’ve heard that one before right?). Always find the smartest way to get the things you need or want without blowing a hole in your wallet. We live in a world where facilities such as rent-to-own and personal loans (such as the ones from Promise) can go a long way towards helping you out but keeping a watchful eye on your finances and making a consistent habit of setting aside something (even if it’s just a little bit) every day are truisms that are likely not going anywhere soon. 

The big balancing act then is likely going to be between freeing up enough cash to meet your day-to-day living expenses while setting aside enough to grow for the future. Try your best to save money. Listen to your elders who may have told you this. Saving in combination with other financial practices can help make sure that you don’t have to be a super-efficient accountant or the smartest person in the world to survive and thrive. 

As cliché as it may sound, it really does come down to discipline and self-control. The more you have, the more you will be able to set aside, save and grow. 

To an extent, growing your personal net worth begins with saving. Here are just some of the reasons why you should seriously consider saving (if you aren’t already).

In case of emergencies

You never know when you will get hit by unforeseen circumstances. The car breaking down in the middle of a business trip, you or your loved ones developing an illness that requires financially demanding treatment. Dealing with these kinds of situations are tough enough. They can get much more difficult without sufficient funds to handle these emergencies while still having enough for daily life. This is where saving can come in very handy, at least so you won’t be as severely impacted as you could have been.

To buy a house

Buying that piece of property can be a huge step towards independence, it’s that dream that many people have. A roof over your head, a place to start a family, a place to live and grow old but in order to achieve this, you're going to need money (often a lot of money). For starters, you’ll probably need to be able to afford a downpayment which is at least 5% of the house’s purchase price. The bank might lend you the other 95% but be warned that you might find other costs and fees that you’ll have to deal with as you go about buying your dream home.

To have fun or to pamper yourself with something luxurious

How about treating yourself or your loved ones to something fun or luxurious every once in a while? This is very possible (as long as you can afford it). Buying your son that bicycle he’s been going on about or taking that holiday overseas. These things become more achievable once you’ve had the foresight to think about saving up for them as opposed to merely thinking about them. They could, in fact, be achievable within a few months by just taking simple steps like scaling back your daily cappuccino to one cup instead of two and restocking the fridge with snacks like potato chips once a month instead of once every week.

For sinking funds

Think about how pleased you’d be that you had some money set aside for improvements or repairs for things that happen around your home or to the car. These things are almost bound to happen at different points and when they do, they can make a significant dent in your savings (and even your monthly cash flow) if you haven’t prepared for them. Not everyone thinks about setting aside for these things even though they can happen quite often and can become quite a nuisance/disruption to daily life. Having something set aside specifically for dealing with these issues is done through something called a ‘sinking fund’ and can help ensure that you won’t have to reach into your emergency fund every time you’re faced with repairs or improvements. You can base the amount that you should set aside on the expected costs, such as the cost of a car engine replacement.


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