Why is it Important to Save Money?

Saving is hard. Especially if it isn't something that you're used to doing.  Maybe you don't have much to save, don't know how to save, or don't see the point in saving. All of these things can make it even more challenging or make it seem impossible. Let's address each of these reasons one may choose not to save.

I don't have much to save:

Guess what? It is okay to start small. If you're barely making ends meet, you may have to get creative to save, but it is not impossible. Look at your budget and spending and determine what a reasonable savings goal could be. Maybe you'd start off by saving an extra $5 each payday. If you get paid once a week, that's about $20 a month, which adds to $240 a year. 

I don't know how to save:

I get it; sometimes, we're lucky to just have something left over after paying all the bills and taking care of responsibilities. At that point, if you have something remaining, you may be inclined to go ahead and "treat yourself."  While you should enjoy the fruits of your labor, treating yourself doesn't have to mean going out to spend all the extra dollars that you have. Treating yourself may mean putting some money away when you have a little leftover. As discussed earlier, it doesn't have to be a lot. If you don't already have one, opening a savings account would be a good idea (and safest), but it doesn't even have to start there. Get a jar, a piggy🐷 bank, an envelope, whatever, and begin to stash some cash. Commit to putting a certain amount in whenever you have some extra money. You can increase the amount later, but saving is a habit that you want to enforce and reinforce as much as you can. After a while, it will become second nature, and you won't think twice about saving. 

I don't know how much to save:

Again, you have to start somewhere. While different benchmarks suggest how much one should save, I believe that just getting started is first and foremost. Once you get the hang of it and as you get pay raises and bonuses, of course, try to increase the amount you're saving. According to popular benchmarks, ideally, once should be saving a minimum of 10% of gross pay.  The more that you're able to save, the better. 

I don't see the point in saving:

You may not see the point in heavy rainstorms, but you probably carry an umbrella. Yeah, you may get wet, but not soaked as much as you would without your umbrella. Think of savings as an umbrella, it may not protect you from all of the rain (or all financial emergencies/situations), but it will provide a shield to lessen the impact.

Example Scenarios with a $500 Financial Emergency:

• If you have $500 saved and a $500 car repair needed, you're fully covered; YAY! 😃
• If you have nothing saved ($0) and have a $500 car repair needed, you're in trouble! 😟
• If you have a $500 car repair with only $250 saved, well, at least you're halfway there. 😐
• If you have to work some extra hours, it's still less than if you needed to come up with a whole $500.
• If you need to borrow some money, it's less you'd have to ask for (so maybe more likely to be able to borrow what you need). 
• If you have to use a credit card, that's less you'll have to charge (which may be very important if your card is close to being maxed out).

The bottom line is that saving is essential. Life happens to all of us, and financial emergencies are going to happen. The goal is to be prepared or at least somewhat prepared. Instead of one financial circumstance taking you down hard, savings can help cushion the blow and protect you from the stresses that typically come with financial emergencies. Personal savings also help prepare you for the future and could help to support you when you retire. 

Life is full of surprises, some good and some not so good. When dealing with surprise financial emergencies, those aren't good, but they don't have to be devastating. You want to be in a position of power. Savings provide you a safety net to catch when you fall. Managing money like a boss is about managing risks and being as financially prepared as possible so that you're ready to face the surprises thrown your way.