Many people know that they should be stashing away a portion of their income. Yet too many people treat this essential activity as an afterthought. To illustrate this point, data published by Statista shows that UK households saved just 9% of their disposable income in Q3 2022.
If we truly understood the benefits of saving, maybe we’d put away more. So, what are they?
In this article, we’ll share four incredible benefits of saving money.
Greater freedom
It can seem pointless saving when you don’t have anything specific to save for. But even if you don’t know exactly why you’re saving today, it will give you more options tomorrow. Like other good financial habits like using a reliable way to improve your credit score, saving opens up more possibilities for your future.
You’ll need money for something big at some point in the future, be it after just a year or a whole decade. Whatever you want to buy, you’ll need the funds to do so. And it’ll be perfectly possible if you already have the money available.
Peace of mind
Finances are a huge stress for many people. A study from the Mental Health Foundation shows that 10% of adults feel hopeless about their finances. This stress is only made worse when you have no savings, as you don’t have anything to help you cope with your responsibilities in the event of an emergency. But if you have a decent-sized emergency fund stashed away, you can face surprise expenses with peace of mind.
Better opportunities
If you’re short on cash, it’s harder for you to seize the moment. Taking opportunities like starting your own business or moving to a new area require good enough finances to get the ball rolling. Without saving, you might find that you aren’t able to jump at the many opportunities life throws your way, because you don’t have the financial stability to take calculated risks.
More work flexibility
Having savings also comes in handy if you are made redundant, want a career change or even just want a break from work. For most people, the financial instability of being out of work is devastating. But with a comfortable cash cushion under you, you have the freedom to hop off the hamster wheel and explore different options. Far from being a threat to your career, taking time off can give you the space you need to actualise your broader career goals – but this isn’t possible without the financial stability that savings give you.
Which of these benefits of saving would make the biggest difference to your life?
