We all have resolved to save seriously more than once in life. But, at the end of every month, we find ourselves rethinking our finances to keep up with our expenses and spending every last penny before we remember our resolve to save. And even though our parents’ generation loves to remind us of the advantages of starting saving early in life, it seems impossible to do.
Granted, building financial discipline to save every month is difficult, but once you begin saving regularly – it is easy to see the benefits. And that’s why it’s time to get serious about savings today. Unlike our parent’s generation, we are blessed to live in a technologically empowered world where we have several options where we can invest our saved money and earn good returns. The simplest option is to open a digital savings account, but that’s just the beginning. Explore a wide range of financial instruments that keep your money safe and secure while offering good returns.
5 Reasons Why You Should Start Saving Early to Create Wealth
Apart from the benefits of having money on hand, your savings could prove handy in an emergency or bail you out of financial trouble. We have put together five important reasons why everyone should begin saving earlier rather than later in life. We hope these reasons will inspire you to begin your financial journey on the right foot.
Save for a Secure Future
The most basic reason anyone would save money is to secure their future against unforeseen mishaps. A few decades ahead, you will not be able to go to work anymore; that day, you should have enough money saved to maintain your standard of living until the end of your days. Invest in a retirement fund and sleep easier knowing you will be cared for when you are older, click here to know more.
Compound Interest
Saving early enables you to leverage the power of compounding. In other words, the earlier you start saving and investing, the more interest you earn on your investments. Starting early also allows you to save smaller amounts to reach the same financial goals. Here’s a look at an example
|
Details |
X | Y |
| Amount Invested | Rs.4000 per month |
Rs.8000 per month |
|
Number of years |
35 |
25 |
| Total Amount | INR 16,80,000 |
INR 24,00,000 |
|
Rate of Return |
10% |
10% |
| Amount at the age of 45 | Rs. 1.15 Crore |
Rs. 1 Crore |
To Fulfill Your Desires & Aspirations
We all have things we love to do in our free time. Some people build collections of rare stamps or books, some people love traveling to new places, and some people like to pursue adventure sports. But a lot of these hobbies cost money. Even if you spend only a few hours on your passion in a week, it’s nice to have enough money to indulge in what you love. While your savings may not afford everything you want, you can do a lot if you have a bank balance. The benefit of saving money early on gives you the freedom to fulfill your desires and aspirations. To know more, click here.
Mitigate Risks in Life
When you begin saving early in life, it builds a financial support system for you and your family. Your savings act as an emergency fund that you can dip into whenever you need to spend more than your monthly expenditure. It helps make you feel secure about your financial condition and meet emergencies without taking on debt.
Correct Your Past Financial Mistakes
Most of us have faltered in our financial decisions at least once. Making mistakes at a young age prevents you from getting into huge losses. By starting to save early, you give yourself the opportunity to learn from your mistakes and correct them as you grow financially.
Financial planning teaches you to tread carefully in the face of risk and always be prepared for any contingency. Start researching your options and find lucrative avenues to invest your savings regularly. Starting to save early seems like an unnecessary sacrifice at a young age, but as you grow financially and emotionally, you will realize why savings are important. Your savings are a treasure trove that will support you throughout your life.
Author Bio: Naina Rajgopalan has a thing for numbers and a deep fascination to learn about all things finance. She’s been money-wise from a young age and has always shared her knowledge and tips with those around her. Being a part of the content team at Freo Save, a neobank that offers a 7% interest rate on savings along with benefits such as insurance on balance, safe & secure banking, and so on, Naina stays updated with the latest of what happens in the banking and fintech industries. She has taken upon herself to share her knowledge with readers across all walks of life to help them manage their finances and budgets better, so they can make better decisions while spending, borrowing, investing and saving.
