4 Reasons You Should Save

Want to become financially secure? Depending on whom you ask, you will get different suggestions for the specific tactics you use, but the one thing they will all agree on is that it is important to have savings. 

Why? Here are four reasons.

As Protection Against Rising Prices

Prices rarely stay the same, and when they rise, your salary and other income won’t stretch as far as it used to. When you have money set aside, that helps to shield you from the effects of inflation, ensuring that you are able to continue to afford to buy the things you need.

To Keep You Afloat in the Event of Reduced or Lost Income

Your salary might cover all of your expenses now, but what would happen if you lost your job, or kept it but your hours were reduced? If you have savings, that money can help you stay afloat until you find a new job or things pick up and you’re back at full salary. 

For Emergency Purposes

By definition, emergencies are unexpected and often unpredictable. They can also be expensive. Having savings can help you to afford the additional expense that can come with an accident, illness, fire, or some other crisis. It also means you don’t have to add worrying about your finances to the stress of an already challenging time.

To Help You Achieve Your Financial Goals

Perhaps you dream of buying your first car (or getting a new one) or making a down payment on a home. Maybe there’s a dream destination you want to visit. If you have money saved up, that can make your financial goal more attainable by reducing the amount of money you need to borrow, or, depending on your specific goal, eliminate it completely. 

Whether it’s for something you can count on, like prices going up; something that’s difficult to anticipate, such as falling ill or getting laid off; or something that you don’t have yet but aspire to, like that trip to Disney with your family, having a financial cushion can make it easier.

Learn how you can save on a limited income or if your income varies from month to month. And find out how to set realistic savings goals.

Visit our MoneySmart hub for more articles, videos, and tips on how to secure your finances. Have a specific question you’d like answered? Submit it and it could be answered in our Ask the Expert column.