Saving requires that you put away some given amount of money with the intention of using it sometime in the future. It sounds quite easy to do but requires lots of self-control and determination. There are many forms of savings, which can be done through a variety of channels. The choice of how much to save, institution to save with, and for how long you will keep your savings will depend on personal needs and abilities. Some of the top reasons to save are highlighted below.
Reasons to save money
To have financial independence
Having financial independence is one of the main goals for almost everyone. It means that you get a stronger spending power and thus, less financial stress. Having a good amount of money in your savings account means that you will have somewhere to fall back to when facing a financial crisis. You will not have to run to creditors and lenders for support. You will also be able the sole determinant on when and how you will use the money, and you will not be governed by any restrictions except those that you place yourself.
To access loans easily
Having some savings in your account will allow you to access higher loan amounts easily. Many financial institutions currently only offer mortgages and car loans to individuals who can place a down payment on the loans. You are not allowed to borrow the money for down payments. You can thus use the savings that you already have in your account for this purpose. The more down payment you place, the less the interest you will be charged on your loan.
To earn interest
Another great incentive to save money is to earn interest from it. A majority of the banking institutions offer some interest on the amount placed in savings accounts, provided the money remains in the account over a specified period. This means that you can increase the amount of money you have by simply placing it in a savings account. The amount of interest you earn will primarily depend on the financial institution that you bank with, meaning that you will have to select the institution carefully.
To buy something you desire
There are many things that you may wish to buy but cannot afford them now due to financial reasons. Saving with the intention of buying the item in the future will enable you to afford it and fulfill your desires. An example can be saving to buy a car or even build your home.