5 Reasons You Should Be Saving More!

Tue, Jun 19, 2012

Financial Advice

Whenever we watch or read the news these days we seem to find more and more reasons why our economy isn’t doing well and more and more cases of people who are struggling with their personal finances. The truth is that more of us are worried about our finances than ever before and that more of us have gotten into a worse financial situation than ever before. A recent article from the Oxford Press revealed that in March “U.S. consumer credit grew by $21.36 billion” while credit card debts also rose “by $5.1 billion.” Even people who have been considering themselves relatively financially secure have found that they are struggling to meet payments and accruing debts. With that in mind we thought it would be worth examining 5 reasons you should be saving more.

1. Retirement

This is universally the biggest reason that people need to be saving more money. Over 60% of all people are unprepared for their retirements. We all want to retire as early as we can in live but without proper forward planning this is a dream that is never likely to reach fruition. Even within countries that have some form of state pension scheme people are still not putting enough money aside to fund their retirements. If you wanted an income of 20,000 a year you would need at least 500,000 in the bank. When we additional factor in inflation, emergency costs, medical costs and other ad hoc factors you will additionally need savings that are not directly tied to your income in order to remain afloat. But we all know how hard is to save money, right? There are few tips you should know about managing your money when saving, BankWest (http://www.bankwest.com.au/personal/savings-term-deposits/savings-term-deposits-overview) recommends you to change your credit card into a debit one and make the saving a top priority.

2. Property

Despite the myriad of problems facing the world housing markets at the moment the reality is that eventually the majority of people will want to buy a house. The recession has meant that credit is more expensive and though prices are low it is harder than ever to secure a favourable mortgage deal. If you realistically want to own a home by the time you are 40 then you need to start saving as soon as possible to reach this goal. After you’ve purchased a house you’ll need to start thinking about money towards retirement so the sooner you start the better!

3. For a rainy day

This might seem a somewhat comical and trite saying but as a reality saving for a rainy day is incredibly important. Whatever you do in life you will eventually have sudden mishaps that require urgent capital to be rectified. Your car breaking down unexpectedly, your family needing money or needing a new computer can all cause serious financial strain if you do not have some form of nest egg to fall back on.

4. For your family

While we are suffering an economically fraught period we all want to make sure our family is financially secure; both now and when we pass on. For anyone with children you already know how expensive they are but anyone planning family should also be saving. We all want to be there for our family and leave them something when we move on so saving for this is absolutely essential.

5. Medical care

The harsh reality is that medical costs continue to rise year on year and that if you don’t have medical cover you should save towards it. Even if you do have medical insurance or some other form of cover costs can quickly escalate and many people will find they are unable to get a reasonable medical insurance policy at some stage.  Even if you have insurance you also need to factor in that as you age you may also need additional care in some form or another. This can be very expensive and it is a good idea to hedge against this eventuality.

With all these reasons to save in mind you will hopefully have the desire to save much more firmly embedded. Ideally you will want to save at least 10% of your monthly earnings and preferably a lot more. There are many websites that can offer advice and guidance on the right types of savings accounts and it is a good idea to have a mixture of accessible and non-accessible savings so that you will never fall short of the money you need and the money you want to put towards your future.

, , , , , , , , , , , , , , , , , , ,

Leave a Reply

CommentLuv badge