Saving money is by no means a glamorous task – and often, the last thing we want to voluntarily engage with is planning our own finances. But saving is nothing short of crucial for both your short-term stability and long-term comfort, for a wide variety of reasons.
With the cost of living crisis, increase in energy bills, and uncertainty around the economy, now more than ever it’s important to have something to fall back on in case of an emergency.
Below are some of the essential things that make saving money a worthwhile pursuit, together constituting a powerful argument for starting your savings journey today.
The Cost of Living
The biggest and most prescient reason for which you should be thinking about your savings is the cost-of-living crisis. It has been a mainstay in our lives for well over a year now and came on not too long after the economy was weakened by the coronavirus pandemic.
While present economic circumstances will not necessarily endure as they have, they serve to illustrate – alongside the pandemic – that any number of things can have incalculable impacts on the affordability of everyday life. Building a healthy saving strategy in the present is vital for heading off future storms. No amount is too big or too small to put away if it guarantees you have something to keep you going in the future.
Generally speaking, having some money set aside is invaluable. Regardless of long-term economic conditions or future plans, and even in an ideal financial landscape, saving is essential for keeping life affordable. This is because unexpected or emergency costs can have profound implications for anyone’s financial situation.
You may have experienced this once before. Whether your car breaks down or your home’s boiler suddenly presents with an issue, you’ll find yourself on the receiving end of a nasty bill that didn’t factor into your financial planning. Indeed, financial advisors commonly suggest that your first mission when saving money should be to create an emergency fund, comprising several months’ worth of your salary. This can save your longer-term savings from the shock of unexpected expenditure.
The cost-of-living crisis has multiple aspects but has been more or less defined by one in particular: energy bills. The cost of gas to consumers remains incredibly high in comparison to pre-2021 prices, and shows no signs of coming down any time soon. Many are suffering with the increase in costs, unable to afford the changes.
These high bills, coupled with the changeable nature of variable rate mortgages and other consumer contracts, can quickly make your monthly budget precarious. If you are struggling to budget in the current climate, it might be a good idea to write down your costs and figure out your expenses. Anywhere you can cut costs can be put away into a savings account. Savings are valuable as a short-term solution to these regular costs – and your savings plan can also be catered to take rising costs into account.
Quality of Life
Of course, none of the above has taken into account that which truly matters: your quality of life. Life is to be lived, not enjoyed sparingly, and you should have every opportunity to take holidays, buy the things you enjoy and generally treat yourself. Living frugally does not mean cutting these things out, but instead means budgeting so you can afford them – and saving money is a central part of the solution. When done in moderation, you can have fun and save at the same time without compromising your quality of life.
Savings doesn’t always have to refer to something bad happening in the future. Oftentimes, it comes in handy when you’re in dire need of a break or mini getaway. It gives you the opportunity to treat yourself to that bag you’ve wanted or a quick staycation over the weekend.
Whatever reasons you have, starting a savings pot is essential to future proof yourself. Whether it comes in handy for a rainy day or not, you have the comfort of knowing you have a pot of cash in case something does arise on the horizon.
Avoid cutting out luxuries to save and instead, create a saving plan that works for you. Start off small and build your way up and you’ll find saving a certain amount of money every month becomes easier and easier as time goes on.