’)
A great deal of emphasis is placed on getting out of debt and with good reason–debt can create financial problems that cripple consumers and severely limit their financial freedom. But for people without big debt problems, another issue to address is a general lack of savings. The savings rate is getting better in the U.S. but it still has a long way to go before people have adequate cushions that can help them sleep better at night.
A report issued just a few years ago found that only 18% of families that would typically be considered “middle class” had three months worth of expenses stashed away in savings. A similar survey found that over 60% of people under age 45 didn’t even have $500 set aside for an emergency. An alarming number of people are living from paycheck to paycheck and are only one negative surprise away from serious financial difficulty. The end of the year is a great time to set goals that will improve your life and this year could be a great time to focus on saving money.
For An Emergency: Imagine showing up at work to find a pink slip on your desk. How long would you be able to survive if your income disappeared tomorrow? It’s a reality for millions of people and some have been better prepared to handle it than others. So many things can happen to jeopardize a person’s income and having some money set aside can be invaluable in these “rainy day” scenarios. If your thought is to go get a loan if you ever need access to cash, good luck! Lenders don’t do well with desperation. Take care of yourself by getting 3-6 months worth of living expenses put away as soon as possible.
For Peace of Mind: A lack of savings can increase the amount of fear, stress, and anxiety you feel every day. Having some money in savings is empowering because everything is easier to handle if you have a cushion when hard times come your way. Having money saved provides a sense of security and will give you confidence that you will remain in control of your life regardless of the hand your dealt. Starting a savings program, even if you’re just saving a little here and there, is also motivating because you can feel great about the fact that you’re putting yourself first and taking care of your priorities.
For Your Hopes and Dreams: Everyone has goals and ideas about what they would do in a perfect world. Saving money will get you closer to making your dreams a reality. If you dream, for instance, of owning a home in a favorite vacation spot, it starts with saving money. Dreaming of an early retirement to enjoy golf and time with your family? Again, it all starts with saving. Your goals are important and you give yourself a better opportunity of achieving those goals when you sacrifice some spending today and save a little money for tomorrow.
