Interest rates on savings are historically low so it can seem that saving money is just not worth it when the interest earned will be negligible for small amounts of savings. Many people think they might just as well live for the now and spend what spare money they have. However, saving money is a good life habit to build for the future and it doesn’t have to restrict the fun you have today if your spending and saving are properly planned. Here are some good reasons to save as much as you can even though interest rates on savings are currently negligible.
Many people believe that as long as all their bills are paid each month then they are handling their finances well, but there are problems with this kind of outlook because it can restrict future opportunities. So if you have ever asked yourself should I bother saving money, here are a few reasons why the answer is yes:
Having the cash to deal with emergencies
Expensive emergencies will always occur in life from time to time and they are not usually situations that you can insure yourself against? For instance; your heating breaks down in the middle of winter, or you need new tyres, brake pads and brake discs for your car all at the same time (as I did recently). There are many other situations such as these and we often just bear the cost on our credit cards but if you have an emergency fund set by then it would come in really handy at these times and prevent you building up too much debt. An emergency fund simply makes sense and you can quickly build one up by saving just a small amount each month – an amount that you will quickly not miss once you get into the saving habit.
Saving For A Wedding
If you have ever dreamed of a fantastic wedding you probably already know they are never going to be cheap even if you do keep it fairly simple. Starting to save now makes sense if you want the wedding of your dreams in the perfect venue with the perfect dress, food, flowers. It makes sense to start a wedding fund sooner rather than later and as with an emergency fund a small amount saved every month can quickly build into a substantial amount. You may think you can just cover the cost of the wedding with a loan but what if you have a bad credit score?
Enjoying an experience of a lifetime
A luxury holiday, a prestigious new car or maybe just taking time out of the rat race and travelling the globe for a year; all of these experiences cost money so are another good reason for saving as much as you can rather than getting in to debt to fulfil your dreams.
Buying your very first home
In these days of stringent affordability checks you will need a significant deposit for a chance to buy your own home. So unless guarantor loans are an option because you have wealthy parents or grandparents to act as a guarantor, you had better avoid debt and start saving for that deposit. The larger the deposit you can put down on a home purchase, the better interest rate you are likely to get for your home loan.