If you need any reason why you should start saving money, it is the present state of the global economy. See below 10 Reasons Why You Should Save Money.
Saving money, while it sounds difficult given the rising cost of living, is usually easier said than done.
The confidence that comes with having some money stashed away, whether it is to achieve a particular or for a rainy day, is unparalleled.
One of the beauties of having some savings is the confidence it gives when making smart life decisions.
How to start saving
If you haven’t inculcated a habit of saving a part of your salary yet, starting with small steps and setting up a weekly, biweekly, or monthly saving plan would help ease you in.
At the end of the day, getting started on the journey to save money will enable you to have a good lifestyle.
Saving money can open the gateway to financial independence, a recipe for living worry-free.
If you are intentional about your saving your money, we recommend opting for money-saving apps in Nigeria.
Other than the ease of depositing your money, they are known to have features and tools that will guide you through the journey.
What to look for in money-saving apps
As stated, other than just making mobile payments, money-saving apps can help you save, monitor, and manage your finances.
Some of the features you should look for when settling for a money-saving app include;
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Rewards
Several money-saving apps offer rewards or cash incentives for savers who exercise discipline and meet their savings targets.
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Cashback
Similar to rewards, some money-saving apps offer cash as interest on the money saved. For instance, if you stick to your saving goal for the month, you are likely to receive a certain percentage of interest on your money.
Others also offer bonus cash for users who refer others to their platform.
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Privacy and protection
If you truly want to save money in Nigeria, security should be a critical consideration as a money-saving app user. This is even more important if the app is connected to your bank account.
When using any of these services, it is critical that people use unique passwords and, when possible, two-factor authentication to keep information secure.
10 Reasons Why You Should Save Money
Disci[plining yourself enough to save money is an important life lesson which gives a number of benefits.
Yes, you can’t do away with your financial needs, but if you are able to prune down some unnecessary expenses, and cut costs on the expensive ones, you should be able to succeed in saving your money.
As it is popularly said, saving is consuming less today so that you are able to consume more in the future.
There are several reasons why you should save money. Some of them are listed below.
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Financial independence
One of the most important reasons to save money is to gain financial freedom. This means not being completely dependent on your monthly paycheque to sustain your current lifestyle.
If you have enough savings to fall back on, you can take major life decisions without worrying; whether it is changing your job, planning a vacation, getting married starting your own business, or even retiring when you want to rather than working because you have to.
You can take these major life decisions without taking any stress if you are financially independent.
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Living debt-free
Saving your money every month regularly is one sure way of getting out of debt.
Paying off and reapplying for loans for most of your expenses could land you in some serious trouble. You need to have some funds stashed away to pay off your existing loans and not incur high penalties in the form of late fees or charges.
Having paid off your debt, you can then continue the saving tradition to meet exigencies when they arise.
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Unforeseen expenses
There is no way to determine when you will have an unexpected expense knocking on your door. It could be a health emergency, car trouble, house repairs, or even a family event.
If you have some savings in your bank account, you will be able to manage these unforeseen expenses much more prudently. It is always better to be prepared for these expenses and have some savings to fall back on in.
You need to have some money in an emergency fund, which can be used when unexpected things come up, rather than borrowing money from friends or family. Building an emergency fund regularly can also help in maintaining your budget and keeping a check on your monthly spending.
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Making a big money purchase
From buying a home, and purchasing a car to taking a vacation, some of the most significant financial decisions that a person makes saving towards a goal.
If you are planning to take a home or a car loan, for instance, you need to pay a part of the price as the down payment. This can be anywhere from 10-20% of the total purchase price, and only then banks will consider lending you the remaining amount. You will be able to pay for this only if you have saved enough money.
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Planning your retirement
Your retirement is one good reason why you should save money. There used to be a time when people retired only after 60. It seems those days are gone.
With the right saving method, using the right tools, and the right platform, you can work hard for a few years and save enough money to retire early and enjoy your life.
By saving money properly, you can ensure that you retire when you want. All you need to do is set a target, work hard to achieve that number, and then take a call on whether you want to work or do something else in life.
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Building an education fund
As long as you intend to have kids, whether immediately or sometime in the future, knowing that higher education is getting increasingly expensive should move you to save.
If you plan to support your kids through their university education, you should start a savings fund for them.
Saving for college is very expensive; however, it isn’t impossible, especially if you start early when your kids are still young. This is also a meaningful way to teach your kids to save.
They can also contribute to their college fund by taking part-time jobs, as well as applying for scholarships, and taking work-study opportunities.
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Investment
Economists believe that you should make your money work for you. By putting your money in a savings account, you can make your money grow by getting higher returns.
You could also invest in long-term plans, policies, and schemes, to help you beat the rising costs of inflation effortlessly. Cutting down on unnecessary expenses and creating a monthly saving plan can help you earn higher interest as well as an additional interest income on your salary.
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Financial security
One of the most overlooked importance of saving money is that it allows you to enjoy greater financial security in life. In case you have some money set aside, you will have something to fall back on in hard times.
If you have money set aside for discretionary expenses, you will be able to take more risks, like starting a new business, or taking a break if you want. You can live your life stress-free if you don’t have to worry about money all the time.
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Cushions against sudden job loss
You may have a good job now, but what if you were to lose that job? Suddenly finding yourself unemployed can be frightening and traumatic, but it’s something many people will experience at some point in their lives.
Having savings in place to help cover your living expenses while you find a new job can provide you with peace of mind.
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Room for fun
Do you like to let your hair down once every while? You really don’t have to make a choice between saving money and having fun. In fact, fun is a critical part of personal finance, and it is essential for your financial and physical well-being.
With the proper saving plan, you can always set a little money aside for your weekend flex. And when you have savings, you can do this guilt-free, and without any worry that you are harming your financial future.
Once again, saving money gives you the freedom to do what you want to do. And sometimes that means having a little fun
Tips to enable savings
As already established, even with the right reasons, saving your money requires a lot of discipline. If you are new to savings or find it difficult to stick to your objective of saving.
By applying the following steps, you are on your way to having a stress-free saving run.
- Limit your loan application
Loans may provide a temporary sense of relief, especially when you have an urgent financial need. But the high-interest rates can deplete your savings in no time.
It helps to limit your loan application and as much as possible do without some unnecessary expenses.
- Keep track of your expenses
If you find it difficult to save regularly, try to record and keep a track of your monthly expenditure. This will offer you a clear picture of where you spend. You can then identify the things that are not important and aim at saving more by avoiding those purchases.
- Create a budget for savings
It also helps to devise a budget for each month. You can create a plan at the beginning of the month to target savings and set limits for spending.
This lets you focus on what is important, reduces the chances of overspending, and lets you save as planned.
- Invest
This may sound too technical, but that is not always the case. By opting for an interest-yielding savings account, you are n your way to achieving your saving target.
These plans offer a lucrative rate of interest that lets your money retain its value and beat inflation.
