More Than Just Financial Security: Three Major Benefits of Having Savings
Money is one of those subjects we don’t really like to talk about, it’s cringey, it’s awkward, and it’s downright unpleasant, however talk about it we must, because if we want to be financially secure in our later years, then we have to put plans into action right now.
Having a monthly budget without a plan for savings is a disaster just waiting to happen. It’s one thing if you are just starting out and you have to take the risk that your budget will work itself out, because you have no extra income coming in, but it’s quite another to know that you can save and you’re not doing it for whatever reason – and no, shopping is not a good enough excuse!
Here are three benefits of having savings, which will hopefully kick-start you into action.
– First of all, your savings can be used as collateral for loans.
If you have any dreams of starting a business or going back to school, your savings can make a huge difference between that dream becoming a reality or staying a dream which is never realised. It is so much easier to get a loan if you have assets on hand. For example, your instant access savings in your Clydesdale Bank account will give you a much lower interest rate for a secured loan compared to applying for an unsecured loan.
– Second, you gain mental security.
Peace of mind is priceless, remember that. There is nothing better than knowing that you can handle any problem that comes your way because you have money saved for the “rainy” days. This will free your mind in ways that you will not understand until you experience it.
Professional day traders always say that if you are trading like you have to win, you will lose. If you are trading like you don’t care about the money that you are putting into the stock market, you will usually do much better. Taking the pressure off will allow you to make much smarter financial decisions and increase the speed that you will move towards true financial freedom. Putting yourself under unnecessary financial stress and worry means you are more likely to make knee-jerk reactions that won’t help you both now and in the future.
– Third, you will be able to help friends and family in emergencies.
Some families are lucky enough to have a celebrity or a lottery winner to help them handle unexpected emergencies. Does your family have this person? If they do not, why can’t you be this person? Set aside money at the start of every month to save so that you will be debt-free. Most importantly, you have the funds needed when family or friends need your financial assistance during emergency situations. Being a good Samaritan is a great feeling, not to mention great for your karma.
On top of a feeling of financial security, you will also have the three advantages that are listed above. There is so much power to be gained from having savings; don’t let your budget go without it for too long.
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