Save Money. It is one of the most common financial advice.
You might have heard or read this multiple times across the internet. Even my mom, who doesn’t know the p of personal finance, always suggests I save.
But the painful truth is- saving is like defeating a lion in the race. Difficult.
But why is saving difficult? Because we are wired to spend money when we earn it.
We are like- what is the benefit of earning if we can’t spend? And after all, even if we save, we are going to spend it one day. So, why not now?
These logics make saving your hard-earned money seem quite useless. Moreover, the difficulty level increases when you don’t know the surprising benefits of saving.
Hence in this blog, I have shared three benefits of saving money that will probably make you a millionaire in a few years.
3 Superb Benefits of Saving Money
1. Freedom
We all want to be free. We want to do what we desire, in a way we want, live where we like, and with people we love. And this makes us happy because freedom is one of the most crucial things for human happiness.
But sometimes, we get caged in professions that kill us from the inside. We sell our freedom to buy money.
You may want to travel the world, but you are trapped in a toxic job and dependent on paychecks to pay your rent.
The solution?
Savings.
You could have left the job and traveled the world if you had savings. Then, with your savings, you could buy enough time to start your business, learn another skill, or find another job.
Your saved money also provides the freedom to buy things like a house, car, or the latest iPhone. You can do anything you dreamt of. Hence each penny you save today helps you buy time and freedom in the future.
You must gain control over your money or the lack of it will forever control you.
-Dave Ramsey
2. Financial Security
No matter how good your plan is, not everything will go as you have expected. There will always be unforeseen circumstances that can shake the life out of you.
Natural disasters, economic recessions, war, and the outbreak of viral diseases, are some mass events nobody can predict.
Similarly, individual events like health emergencies, job loss, and business bankruptcy can push anyone into the dark hole of debt.
There is always a chance of occurrence of these events. The bad news is we can’t avoid them because they aren’t in our control.
The good news is we can save money and prepare against them, which is entirely in our control. Here saving acts as a safety net that lowers the magnitude of damage caused by these unfavorable circumstances.
For example, say Amit runs a clothing shop in Delhi and earns bucket-full money as profits. He knows the importance of saving, so he tries his best to spend less and save more.
Then 2020 comes, and the Covid19 outbreak leads to lockdowns that lasts longer than 10-12 months. All the shops are closed, and their revenues become zero within days. Those who don’t have savings are facing severe heart attacks.
But our Amit has wisely saved for unforeseen situations like this. He is out of danger and can survive years when shops finally will open. And once again, he will have a business.
Saving saves lives. Wise Amit! Be like Amit.
Save when you don’t need it, and it’ll be there for you when you do.
-Frank Sonnenberg, The Path to a Meaningful Life
3. Wealth and Mental Peace
Our wealth is how much money we have saved in our bank. And it depends on three factors- how much we earn, how much we save, and the return we get through investing.
Out of these, the first and third are challenging to control and increase. But the second, how much we save, is entirely in our control and can be quickly implemented.
Increased savings rates can easily help us have millions in our bank over time and be wealthy.
Now, you would ask, why do we need to have millions in our bank?
The answer is- for mental peace.
You know you have money to face unfavorable circumstances and fulfill any dream. You can fund your child’s education, travel to any corner of the world, retire early, spend on health emergencies, and do everything you need or desire.
The fact that you are free and financially secure gives you immense peace to live a happy life.
Building wealth has little to do with your income or investment returns, and lots to do with your savings rate.
-Morgan Housel, The Psychology of Money
But How to Save?
Saving is important because it provides freedom and makes you financially secure and wealthy to live a life full of joy. The above three points are enough to convince the importance of this small action- saving money.
So, don’t underestimate its power and save each penny to enjoy its benefits in the future.
To get started, note down your expenses every month, and analyze them to find where you could save. Spend money only on the needs and ignore the desires. Food is a need; the latest Apple watch is a desire.
Try to keep aside 20-25% of what you earn every month in your savings account before you even start spending. These few steps are enough to make you a pro saver who will be a millionaire in the coming times.
Do not save what is left after spending, but spend what is left after saving.
-Warren Buffett
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