The Importance of Saving Money

There are many reasons why saving money is a great habit, and one of the most basic tenets of good personal finance. If you have enough money saved, you don’t have to worry about going to work every day at a job you hate. If you have money saved, you can actually retire, and do things that you enjoy without having to worry if you are going to have the money to pay the bills.

Of course, saving money is a habit that often requires a lot of discipline, as it is easier to simply spend the money on things you want rather than to save money. It is easy to take extra vacations, or buy lots of nice things to have around to keep you entertained. If you get in the habit of constantly doing that, it will be hard to save money, even a little bit.

However, if you are able to slowly begin saving money, even a small amount like $5/week, you will be able to increase that over time. The hardest part is getting started, and the easier part is building based on what you have begun. In his book “I will Teach You To Be Rich”, Ramit Sethi talks about the 85% rule. That is, it is better to know 85% of something and get started than to wait until you know 100% about something, because that day will never come. People start to think they need to know the right accounts and everything about saving before they get into the habit of doing it, but the important part is doing something, even if you are not doing it perfectly right.

Another reason that saving money is a good habit is because it allows you to cope in the result of any type of emergency. Having some type of emergency fund is vital when you get in a car accident, or have unexpected medical bills. Without any savings, you would be forced to use a credit card, which could put you into debt, and delay any type of financial freedom or financial independence. Saving money is crucial for that reason.

The most basic tenet of personal finance is to spend less than you earn, and save the rest. This allows you to do many things in life, most specifically to stop worrying about money and spend your thoughts on more important things. If you are able to save money, you will be very happy that you got into that habit.