Top 10 Reasons to Save
Learning to save is one of the most important skills you can learn in life. Saving can reduce financial stress and make life much more comfortable.
1. Buy a car – A car is a necessity for many people, and a reliable vehicle is a major expense. Putting money away for a down payment will help you achieve lower monthly payments if you require financing.
2. Take a vacation – Life is stressful and everyone needs/deserves a break from time to time. A vacation is a great way to recharge your batteries, so you can go back to work refreshed. The cost of a vacation, however, can add up quickly. Putting money away for a trip will eliminate the stress of spending money you don’t have and save you from putting vacation expenses on a credit card.
3. Give to others – Putting money away regularly can allow you to feel confident in your ability to surprise your loved ones with gifts and to make donations to meaningful causes.
4. Pay off debt – While saving can make affording the things you need easier, it’s rare that someone is able to live debt-free. Learning to save early in life will allow you to make larger payments and reduce the amount of debt you owe.
5. Make a down payment on a house – Making a down payment on a house can make your mortgage much easier to manage. Making a down payment of at least 20 percent of the accepted offer will also allow you to avoid paying for private mortgage insurance (PMI) – saving you money in the long term. A larger down payment will also decrease your monthly mortgage payments.
6. Pay for college education – Putting money into an education fund will make the cost of a college education easier to stomach. Parents and guardians can establish a 529 plan or other education fund for their children, and anyone can contribute to it.
7. Contribute toward retirement – You probably don’t want to work your entire life. That’s why saving for retirement is essential. It will allow you to focus on the things that are most important to you, such as family and health, when you’re ready to retire.
8. Pay for the unexpected – You never know what unexpected expenses may arise from year to year. You might have to replace an appliance or pay for major car maintenance. Having money saved up will allow you to avoid using high-interest credit to pay for such expenses.
9. Pay for emergencies – Tragedy can strike anyone at any time, limiting or reducing your monthly income. Having six months of living expenses saved will help you avoid financial hardship should such a tragedy occur.
10. Because it’s fun – Yes, saving CAN be fun. It’s extremely satisfying to watch the balances in your savings account grow, and if you are able to adopt a successful savings plan, you may come to enjoy doing so. Plus, knowing you have money saved to cover all the expenses that you may encounter from year to year will allow you to focus on the things you enjoy most.
Start Saving Today
These tips are provided by the Iowa Bankers Association.