For some reason, many people seem to be either resistant to saving money, or just blind to the importance of it.
Why do we think it's more important to pay off debts than it is to prepare for the future? We need to save because we don't always know what the future holds.
If you could accurately predict the future and know exactly how much money you need and when you need it, it would probably even make matters worse.
You would probably convince yourself you have plenty of time and procrastinate, thinking you'll make up later for not saving today.
One of the most common laments of the middle-aged and pre-retirement folks is: "I wish I had started saving when I was younger.
" There is a very good reason for that.
It's called compound interest.
No matter how much you save later, you will never make up for the compound interest you will lose if you don't start saving regularly when you are young.
So, why is saving so important? Emergencies happen.
They come in all shapes, sizes and prices.
Maybe your car will break down.
Maybe your roof will spring a leak.
Maybe your plumbing will spring a leak.
Maybe you'll encounter an unexpected medical emergency.
Maybe you'll be the victim of a job layoff.
Life happens and emergencies are a part of everyone's life.
The difference is how we deal with an emergency.
If you are prepared and have an emergency savings fund, then you simply pay for the cost of the emergency and get on with your life.
If you aren't prepared then you go into debt (or more likely you go further into debt) and wonder why you can't get a break.
Someday you'll want to retire.
The funny thing about retirement is, when you stop working, you stop getting paid.
Maybe Social Security will still be there for you, and maybe it won't.
It was there for my mother, sort of, although I don't know how she was expected to live on $600 a month.
Your best bet is to save for retirement.
If your company offers a 401K plan you should take advantage of it - especially if there are any matching funds.
If they don't, then open up a retirement fund on your own.
Not only will you get a tax benefit for your contributions, but you'll be investing in your future.
The miracle of modern science.
The average life expectancy is much higher than it was when social security was first instituted.
With advances in medical science, public education, and now mandated health care, you can expect these numbers to continue to increase.
A longer life means more money will be needed for your survival-and hopefully you'll be able to save enough to do more than just survive! Children are our future.
If you have children, I'm sure you've at least thought about a college education for them.
The costs of education are rising at a frightening rate every year, not only for private school but for public school as well.
Gone are the days of $17 units.
Now a college education will cost you your annual salary or more for every year.
I highly recommend scholarships and part-time jobs to help defray education costs, but saving money aside in an education fund is something you should also plan for.
Saving is a lot easier than you think - especially once you get past that initial step of just getting started.
If you don't save, I can guarantee that you will never get out of debt and build wealth, and the earlier you start, the better!
Why do we think it's more important to pay off debts than it is to prepare for the future? We need to save because we don't always know what the future holds.
If you could accurately predict the future and know exactly how much money you need and when you need it, it would probably even make matters worse.
You would probably convince yourself you have plenty of time and procrastinate, thinking you'll make up later for not saving today.
One of the most common laments of the middle-aged and pre-retirement folks is: "I wish I had started saving when I was younger.
" There is a very good reason for that.
It's called compound interest.
No matter how much you save later, you will never make up for the compound interest you will lose if you don't start saving regularly when you are young.
So, why is saving so important? Emergencies happen.
They come in all shapes, sizes and prices.
Maybe your car will break down.
Maybe your roof will spring a leak.
Maybe your plumbing will spring a leak.
Maybe you'll encounter an unexpected medical emergency.
Maybe you'll be the victim of a job layoff.
Life happens and emergencies are a part of everyone's life.
The difference is how we deal with an emergency.
If you are prepared and have an emergency savings fund, then you simply pay for the cost of the emergency and get on with your life.
If you aren't prepared then you go into debt (or more likely you go further into debt) and wonder why you can't get a break.
Someday you'll want to retire.
The funny thing about retirement is, when you stop working, you stop getting paid.
Maybe Social Security will still be there for you, and maybe it won't.
It was there for my mother, sort of, although I don't know how she was expected to live on $600 a month.
Your best bet is to save for retirement.
If your company offers a 401K plan you should take advantage of it - especially if there are any matching funds.
If they don't, then open up a retirement fund on your own.
Not only will you get a tax benefit for your contributions, but you'll be investing in your future.
The miracle of modern science.
The average life expectancy is much higher than it was when social security was first instituted.
With advances in medical science, public education, and now mandated health care, you can expect these numbers to continue to increase.
A longer life means more money will be needed for your survival-and hopefully you'll be able to save enough to do more than just survive! Children are our future.
If you have children, I'm sure you've at least thought about a college education for them.
The costs of education are rising at a frightening rate every year, not only for private school but for public school as well.
Gone are the days of $17 units.
Now a college education will cost you your annual salary or more for every year.
I highly recommend scholarships and part-time jobs to help defray education costs, but saving money aside in an education fund is something you should also plan for.
Saving is a lot easier than you think - especially once you get past that initial step of just getting started.
If you don't save, I can guarantee that you will never get out of debt and build wealth, and the earlier you start, the better!