Money is one of the essential resources in the world. You need money to afford rent or housing, to eat and to drink. Sometimes, you earn a little more than you need. During those times, it’s better to save than spend that extra cash.
Here are the top ten reasons why you should save money in 2020:
1. To stop relying on social security
Social security is assistance to people who need an extra hand with expenses for some time. Just because you have enough right now doesn’t mean you shouldn’t save up for the future.
2. To gain more of the compound interest
The compounding effect operates on the principle that whatever amount you leave in the bank will earn more interest in the long run. For example, you have $2,000 in a bank that has a 1.5% annual interest; in the first year, it’ll become $2,030; then, in the second year, it’ll become $2,060.45; and in the third year, you’ll have $2,091.36. Granted that you don’t touch your money for three years, you’ll earn $91.36 from interest alone. Imagine if you save the same amount per year.
3. To save for retirement
It’s almost everyone’s dream to retire early and not have to think about waking up early to go to work. By prioritizing your savings now, you can probably retire by the age of 40 or even earlier.
4. To have children
Raising children is expensive. Save up your extra money to make sure that you can give your kids the life they deserve.
5. To be ready for emergencies
Sometimes, accidents and calamities happen. You should always have an emergency fund so that you can adequately react to any dire situation.
6. To prepare for downpayment
When you’re planning a major purchase like a house or a car, you need to supply a sizeable downpayment so that lesser balance will incur lower interest rates.
7. To set aside money for a business or investment
Passive income is better than working a 9 to 5. Save up so you can have a business in the future. The company will earn you passive income so that you don’t have to work another full-time job.
8. To get out of debt
Debts are liabilities that slowly eat away at your salary. Loans have interests that will increase the longer you don’t pay the entire amount. Save up money so you can pay off all your debts one at a time.
9. To have a good life
Luxury doesn’t come easy to those who weren’t born from riches. If you’re from the middle class, save money so you can eventually afford things you’ve always wanted to buy. With enough savings, you can buy land and a house that could be a long-term gain.
10. To reduce wasteful spending
Sometimes, you might have so much extra cash that you feel like splurging it on a gadget or expensive product. If you’re saving your money instead of spending it, you can be smarter on your purchases.
Did our list inspire you to save this 2020?