Savings: An answer to uncertainties of life and unfortunate events can be back dropped by savings.
Here, we gonna talk about everything about Savings in this order:
- Step Guide To Savings
- Tips To Savings Growth
- Benefits Of Savings.
- Importance Of Savings
It has been a way out from unfortunate events in the sense that it provides the individual with opportunity to enjoy quality life most importantly ensures the individual’s peace of mind.
Again, it can be referred as money in which an individual has reserved after necessary expenditures has been made from their disposable income over a given period of time.
It is the sum of money which is set aside by an individual after consumable expenditures has been deducted from its earnings. It is an amount of money that is likely idle and not being put in any form of risk after necessary spending are made from the individual’s income.
This can also be kept in cash form, bank deposits pension, investment etc. which are secured from any form of risk or loss but they are commonly earned marked for emergencies.
For instance: If Ann earns $70,000 monthly and she has the total expenses to be made which include; House rent = $10,000, Gas = $4,000, Power Supply = $2,500, School fees for siblings = $30,000, Style hair = $3,000, Foodstuff = $10,300, sends home = $5,000 for parents upkeep, Personal upkeep = $3,000.
There is $2,200 left over or reserved for savings. If Ann continues to save up $2,200 monthly and emergencies occurs they will be some money readily available to resolve the issue as it arouse, other than looking for alternative to settle up the issue which possibly leads to debt.
Step and Guide To Savings
There are step by step guide on how to save money as this can help you develop a simple and realistic strategy. You can save for all your long term and short term savings goal. To start, First, you have to figure out how much you spend. You should have idea of what you spend in a month.
Your budget should outline how your expenses measures up to your income so that you plan you’re spending and limit overspending.
If your expenses are so high that you can’t save as much as you want. You cut back, identify non essentials that you can spend less on which includes entertainment and dining out.
Secondly, Give yourself a cooling off period as when tempted by non essential purchase, wait for few days you may be glad you passed or ready to save up for it as you have set a goal for saving.
Here, Thinking of you might want to save for is another important step as you figure out how much money you will need and how long it might take to save it. You can save for emergency funds, vacation, your child’s education, payment for car, new Smartphone etc.
Fourthly, Decide in your priorities as after your expenses and income, your goals are likely to make the biggest impact on how to allocate your savings.
Finally, reviewing your budget and check your progress every month. This helps to stick to personal savings plan, identify and fix problems quickly. Again, having a good knowledge of how to bank money may even encourage you to discover more ways to save and hit your financial goals.
Tips To Savings Growth
Save windfall income — Any unexpected money that comes your way save it.
Collect loose charge and deposit in the piggy bank or place of saving.
Purchase cheaper off brand items and save money.
Break or curtail a habit i.e. Try reducing expensive ventures and apply the money in your savings.
Compare, draft and checkmate your expenditure list before purchase.
Save lunch money, you can bring to work and save the money.
Create and device a budget of saving as this may be daily, weekly or monthly.
Benefits Of Savings.
Helps in Emergencies: Emergencies are sudden and unexpected. When this occurs, there is always requirement of funds which are not part of the regular budget.
At this point, if the funds are not readily available, there is pressure on means to get funds to resolve the issue thereby leading to debt or bankruptcy.
As savings goes a long way in relieving the issue or situation which can be sudden illness, or matter of life and death, etc. This kind of emergencies requires treatment immediately as large sum of money might be needed..
Limits Debt: it helps one to avoid taking emergency loans when unfortunate event takes place as savings can be used to finance certain expenses and limit the amount of debt to be incurred.
Financial freedom: Savings aids in one’s peace of mind as he or she enjoys financial freedom and quality life knowing fully well that any unexpected expenses which arises can be taken care of without being financially stocked.
Cushions Against Sudden Job loss: it can be great cushion of comfort at a time of sudden loss of income as it is very difficult to borrow money when one is jobless. Job loss is usually traumatic and leaves huge crises in most family.
Finance Education: It helps in ones pursuit of career. It enables the individual to finance some expenses in his or her career chase.
Preparation for Retirement: Savings for retirement is another benefit for savings as it ensures availability of funds during retirement. it makes retirement much more comfortable.
Most people find it hard to save money for retirement because of future uncertainties such may be if the individual will be alive to spend the money or not. Irrespective of this, its advised to save some money as it may also come in for your beneficiaries if you will not be there to spend it.
Importance Of Savings
It is important for everyone, regardless of your spending, income and stage of life. These are some of the reasons an individual needs to save. Read more
It offers peace of mind: You can lead a stress free life with the knowledge that you will not have to struggle your way out if an issue arises. It paves a way out of uncertainties of life and provides the individual with opportunity to enjoy a quality life as it supports in hour of need and unfortunate events.
It offers a better future: Savings can be answer to a number of goals an individual intend to achieve e.g. house, vehicle or starting up a business. It must not be saved for a long term goal also for short term like travelling, changing of wardrobe etc.
It provides for your children’s education: You can fuel your children’s dream and pay for the best schools and colleges across the world as considerable amount can be saved.
It gives family security in case of unfortunate events as your family is well provided for. Your savings can act as cushion for your loved ones and help them overcome financial difficulties.
It gives you options and the more you save, the easier it becomes to accumulate additional savings.
If one find it hard to maintain a savings habits, they may be said to be living from paycheck to paycheck. Savings involves reducing expenditures, specifies low risk preservation of money as it’s an activity which keeps occurring overtime.
However, savings serves as a support system towards an individual’s growth as it regulates, help keep track of spending, as it serves as an alternative in times if difficulties and uncertainties of life thereby guarantees peace of mind and less panic in unfortunate events.
Without no doubt, inculcating the financial habit of savings is important as it help in terms of emergency of any kind emanating from our daily living – for health issues and other related life issues.Please Help Share This Post