One of the many lessons of the pandemic is a better saving habit. Many people have become more frugal in their spending on things like entertainment, clothing, and furniture in the last year and a half, whether by choice or necessity.
In case you had the option to set aside some money, you’ve set yourself up for a better future that would help safeguard one against future financial crises, particularly in the event that you can keep saving.
Savings habits are defined as frequently practiced behaviors, done without a particular sense of awareness, with the goal of freeing up funds for saving or debt reduction.
As the pressure from the pandemic eases, wouldn’t it be worthwhile to continue with this habit?
It is crucial that we have sufficient savings for the future, which is defined as either tomorrow or 30 years from now, when retirement will be at our doorstep.
For the following 5 benefits, we think you should continue strengthening your saving habits:
- Saving ensures your retirement years – The fact that everyone will retire someday necessitates saving. If you didn’t start thinking of retirement as soon as you started earning, now is another opportunity to do so. Paying attention to your company’s annuity and retirement policy is something you should not take for granted. Most organizations match your annuity commitment equally, if not more, which, while not necessarily an investment in the real sense, becomes perhaps the best safeguard for what’s to come. Get interested and ensure the figures are adjusted to match your goals as you plan more actively for your future.
- Helps resolve emergencies – No one expects emergencies, but they are as certain as the rising of the sun. Hence, when they happen, our regular budget usually does not cover such expenses. There will be a strain to search and secure additional funds at short notice. If for instance, the issue is an abrupt illness or an accident, it can be compounded. It very well could be a matter of life and death. Accumulated funds can go far in mitigating the circumstance. The patient will get the necessary treatment right away. Other emergencies that could be financed through savings are burial service costs, urgent repairs to the house, and even vehicle repairs. All things considered, such emergencies, as a rule, require an enormous amount of cash.
- It makes financial freedom possible. (Gives independence from the rat race)– With savings accumulated over time, one can enjoy peace of mind and appreciate the joy of financial freedom. There is comfort in realizing that in the event of funds being needed desperately, one has a buffer. This is in contrast to individuals who live from one paycheck to the other. They promptly become stuck financially if there are any unforeseen expenses.
- Cushions against unexpected job losses-The pandemic led to a lot of job losses as organizations were forced to downsize, while some shut down completely. Job loss is usually traumatic not just for the individual but also for the family at large. Saving can be an extraordinary cushion during this season of a sudden loss of pay. It is normally challenging to borrow money when one is jobless. Therefore, the people who have not been savvy enough to save will be down to zero totally after a job loss.
- Limits exposure to debt – With the advent of technology, one can easily incur debts of unimaginable size. With some amount of savings, one can restrict the amount of debt burden that they have. Savings allows one to be more selective with the expenses he finances with a credit card, thereby limiting debt liability and saving the amount that would have been spent on interest.
- Financing further education-Living in a dynamic world today implies one may not necessarily work in a particular profession all their life. Training and updating skills are part of our daily living. Fees for further education are a reality and a major expense globally. Sourcing for funds for further education may not be easily accessible, especially where such facilities do not exist, or even if they do, you are not qualified. With your accumulated savings, one can go ahead and further their education.
To reap the above benefits, remember to reevaluate your spending, postpone big-ticket purchases, and save with simple automation.