3 Reasons to Save Money, Will Give You the Motivation to Start Today
Saving money takes discipline. And a certain amount of sacrifice.
According to Bankrate, more than half of Americans are behind in saving for retirement, and 21 percent of Americans aren’t saving at all.
The importance of saving money is rarely disputed. Saving is one of the most basic (and most repeated) bits of financial advice out there. Despite the importance of saving money, many of us aren’t following through on that tip. When it comes to doing the right thing financially, just knowing you should save isn’t enough.
And that makes sense. It’s tough to do something consistently without understanding why you should save money and put in all that effort in the first place. After all, saving money takes discipline and a certain amount of sacrifice.
Knowing the reasons to save money can be critical if you want to stick with a savings plan for the long term. If you need help understanding the importance of saving money, consider these key reasons why you should save money now:
1. Saving can give you freedom
It can be tough to allocate some of your cash to a savings account if you don’t have a set goal for that money. Why save for later when you can spend on what you want today, right? But among the many reasons to save money is that even if you don’t know exactly what you’re saving for right now, you’ll likely find something you want to save for in the future. A new car, a new home, a child’s education… the possibilities are endless. Plus, it’s critical to have some cash set aside for emergencies and unexpected expenses as they come up.
“It has nothing to do with the money and everything to do with giving yourself flexibility and choice in your life,” says Eric Roberge, CFP® and founder of a financial planning firm that specializes in giving financial advice to people in their 30s.
“When you have money available in the bank you can do what you want without stress,” he says. If you’re wondering why you should save money, imagine giving yourself freedom to choose what you want to do, rather than feeling stuck in a particular situation or position because you rely on the paycheck.Take your financial knowledge to new heights with tips from our quarterly Modern Money newsletterEmailSend me articles about (optional)
- All of the above
How much you should save depends on your financial goals. You may have a tangible goal you want to pursue, like taking a year off work to travel. In that case, you want to estimate how much you’ll need not only to cover the cost of travel, but also to cover regular living expenses if you don’t plan to make an income during this period.
If one of your reasons to save money is to gain flexibility, you can set a specific amount aside each month (hint: automate your savings) based on what you can afford to save after things like retirement savings and emergency fund contributions.
“Saving gives you the freedom to live life on your own terms.”– Matt Becker, CFP®
Roberge says that you could label that savings account your “build wealth fund.” The importance of saving money here is to give you cash reserves that you can use when and how you want.
2. Saving provides financial security
“I love saving money because it means financial security,” says Kara Perez, who founded a financial education company that aims to empower women by providing them with the tools and education to reach their financial goals.
“Plain and simple, having money makes your life easier,” Perez says. “I save because I want my future self to have the same great lifestyle I have now, and I don’t want to get caught in a financial emergency.”
Perez recommends putting money in both a liquid savings account where you can keep cash for unexpected expenses and emergencies, as well as putting money into something like a brokerage account where you can invest for the future.
3. Saving means you can take calculated risks
Part of the importance of saving money is to build cash reserves so you can take calculated risks with less worry. If you don’t have any savings, it may be harder to pursue certain passions. Take starting a business, for example. To be a small business owner, you’ll need financial backing to get it off the ground.
But if you set a savings goal and contribute to your savings each month, you can explore new opportunities, even if they may temporarily impact your earnings (if you set off as a small business owner, paychecks could be slow to come at the start).
“Saving gives you the freedom to live life on your own terms,” says Matt Becker, CFP® and founder of a financial planning practice focused on new parents.
“When I lost my job three years ago, my wife and I used that as an opportunity to start the businesses we’d been dreaming about, rather than scrambling to find another paycheck as quickly as possible,” Becker says. “We could only make that decision because of the years we’d spent building our savings.”
Why you should save money
The importance of saving money is simple: It allows you to enjoy greater security in your life. If you have cash set aside for emergencies, you have a fallback should something unexpected happen. And, if you have savings set aside for discretionary expenses, you may be able to take risks or try new things. Pretty good reasons to save money, right?
If you’re convinced as to why you should save money, you can get in a savings groove by opening an online savings account. And good news: It doesn’t take a lifestyle overhaul to become a saver. There are simple ways to save money, which you can start practicing today. Once you’re in the habit of saving, you’ll forget there was ever a time when you didn’t save.
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You can earn money online, sell, invest, work full time, work part time and even watch videos for some extra cash… all from behind your computer screen.
Instead of scanning through Facebook, stalking your ex on Instagram, or determining which Hogwarts House you belong to via a BuzzFeed quiz, let’s get you doing something much more productive with your time.
Pick Up Some Quick Wins from home
These preliminaries settled, he did not care to put off any longer the execution of his design, urged on to it by the thought of all the world was losing by his delay, seeing what wrongs he intended to right, grievances to redress, injustices to repair, abuses to remove, and duties to discharge.
Low effort, low commitment, and without investment. The ideas in this section are all about quick and easy ways to make money online (and better yet, you can try them all for free).
#1. Participate in market research
Market research companies like to collect data on consumer trends and spending habits so major brands can learn how to better market their products.
This research is most often conducted via online questionnaires, and they’re always on the lookout for new survey participants.
survey sites to check out:
- Survey Junkie – Up to $45 per survey.
- Vindale Research – $1 sign-up bonus.
#2. Affiliate Marketing
Whether you have a website or are still dreaming up ideas for a blog, you can also look into affiliate marketing to make money online. With affiliate marketing, you partner with brands and businesses within the content of your website. If you mention a product or service, you link to that produce or service using a unique affiliate code you received when you signed up for that particular affiliate program. From there, you’ll make money any time someone buys a product or service through your link.
Generally speaking, you’ll want to partner with affiliates that are related to your blog concept. Since We are financial advisors, I have focused a lot of my affiliate energy on financial products like savings accounts, credit cards, and investment accounts.
#3: Online Courses
You can make money online if you have any skill you can teach others. It’s also possible to set up an online course you can market online. You can find online courses that teach anything from cooking to marketing or even freelance writing. Heck, I even offer my own course for financial advisors who want to take their businesses online— The Online Advisor Growth Formula.
Another way to make money online is by hosting an online podcast. I have the Good Financial Cents podcast to go along with my blog, and I use that platform to find new sponsors and advertisers all the time.
I still remember getting my first sponsor on the podcast and finding out they were willing to pay $8,000 for me to include a short clip at the beginning of each podcast for 90 days. That was insanely exciting to me at the time since I wasn’t sure I would be able to monetize my podcast that much at first.
The key to getting ahead with podcasting is finding your niche, growing an audience, and then finding ways to monetize and connect with sponsors. This isn’t the easiest way to make money online since there are a lot of logistics that go into writing, recording, and editing a podcast, but it is still worth considering.
#5: Sell your Photos
Those thought-out photos you take can get you more than just Instagram “likes.”
You can upload your iPhone photos to stock photography sites. And they don’t have to be professional, either. Many of them are trying to get away from the “perfect” photo and are looking for more realistic images.
You likely won’t become a millionaire; Foap, for example, splits the profits with the photographer evenly.
#6: Freelance Writing or Blogging
Freelance writing is one of the most popular ways to earn money online. Many successful freelancers can earn an average of 50 cents to a dollar per word. Some are earning twice that!
Of course, it doesn’t start out like that. You’ve got to build your portfolio and your résumé, blah blah blah. If you’re interested in writing, I’m sure you know this. If you’re not interested in writing, I wouldn’t recommend traveling down this road just for the money.
It takes dedication and time, though it can be highly profitable if it’s what you love. Assuming it is what you love, let’s talk about making money with it.
The Bottom Line
There are a ridiculous number of ways to make money online and the ones I’ve covered here are just the tip of the iceberg. If you have time, a passion for almost anything, and at least some creative skill, you may be able to build an online income stream — or several — if you give it enough time.
But, don’t just take my word for it. If you look online, you’ll find thousands of success stories you can use for inspiration.
One day you could even create a success story of your own. But you’ll never know unless you try.