3 big reasons to start saving your money
3 big reasons to start saving your money
Most people understand the importance of long-term savings but still have trouble putting aside a significant amount each month. Sometimes all it takes is a certain amount of motivation and a specific goal in mind. Without these, you lose sight of what you're trying to accomplish, and it can be very difficult to stay faithful to your plan.
This is very similar to other goals you may have set for yourself in the past. For example, you may have started a weight loss plan in order to improve your energy, look better, and improve your overall health. However, if you didn't keep these long-term objectives in mind, it would be very difficult to stick to your plan (or perhaps even to get started in the first place). You would probably find yourself breaking your pledge repeatedly and eating all kinds of junk food.
In the same way, it's essential to know what you're saving for if you intend to succeed in the long-term and reach your financial goals. So what are your reasons for saving? Many people think about retirement, and that is a good project to keep in mind. However, there are many more reasons to save, and here are three big ones to consider.
Emergency fund
Unfortunately, many bad things can happen to us in life, and these include unexpected illnesses, accidents, and layoffs at work. By definition, emergencies pop up without notice and can have a devastating impact on your family's emotional and financial health. Having an emergency fund to tap into can help you survive financially, but it can also alleviate much of the stress and fear surrounding these amounts.
We highly recommend that you save enough money to cover at least 3 to 6 months worth of expenses in case you lose your job or face some other unexpected tragedy. You may wish to consider putting this money into a money market fund in order to receive a higher interest rate than the savings account while still maintaining liquidity.
Educational expenses
For anyone who has not yet known the joy of having children, it is difficult to imagine how much life changes when starting a family. Your priorities shift dramatically, and you begin to turn your attention to what is best for your children's future. This, of course, includes your educational plans, and most parents try to start a college fund for their children. This is something most parents think about, but it is easy to fall into the trap of waiting too long before starting to save.
Starting your own business
Entrepreneurship is one of the essential characteristics of the American spirit. Many families dream of starting their own business to achieve financial independence while doing something they enjoy. Of course, just about every business you can imagine requires significant amounts of capital to get started. This is just one more reason to begin a serious savings plan.
Clearly, most of the dreams you have for your future (including education for your children, purchasing a home, starting a business, and going on vacation) involve a great deal of money. No matter what your long-term goals are, a systematic savings plan is an important way to get started.
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