4 Important Benefits of Saving Money
Ayush and Rohan were good friends in college. Ayush used to be careful with his spendings, while Rohan was a lavish spender. After college, they both got a job. Ayush got an Rs. 10 lakh package while Rohan got an Rs.12 lakh/annum box. Ayush being a financially wise person, started saving Rs.20,000/month, while Rohan only saved Rs. 5000/month.
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While it looked like Rohan was a wealthier person and would lead a lavish life, the reality turned out to be different. Ten years later, while Ayush had over Rs. 46 Lakhs in savings, Rohan had only Rs. 11 lakh 60 thousand. Ayush could afford to invest in a business, pay for his child's education or make a big-ticket purchase, while Rohan still had to depend on his income to pay for every expense. Ayush had enough savings to help him feel financially secure in a difficult time while Rohan always worried about maintaining his income to maintain his current lifestyle.
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One of the most influential financial books of all time ‘The Richest Man in Babylon’ says that your income is not what you earn but what you save and it makes a lot of sense. All the money that we make is spent on paying other people. If we start to think of how many hours it would take us to earn the amount of money we are about to finish we would realise that we worked those many hours for the person we are paying. This way to think about one’s expenses makes one realise the importance of saving money and paying oneself first.
Benefits of Saving Money
Financial Wellness
Financial Wellness comes when you are in complete control of your finances, meaning you are able to take care of your present finances without compromising on your future investments. Saving money regularly is an important aspect of your financial well-being and it helps you maintain a good financial health.
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You can read more about Financial Wellness on the link below:
Financial Security
Financial security comes from being in a state where your living expenses are well below your regular income. It also requires that you have enough money in your emergency fund to sustain your life in case of an unforeseen circumstance that might hinder your stable source of income.
If you are unaware of what an emergency fund is, you can check out our blog on the same here. You can even build an emergency fund using Wizely:
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Wealth Creation
Your net worth is calculated by how many assets you own minus how many liabilities you have. While most things you buy will become assets but most of them will also depreciate fast. On the other hand, if you save that money or invest it somewhere, they will appreciate, hence adding to your net worth. To become wealthier, it is essential to invest in as many appreciating assets as possible and save money regularly.
Happier Retirement
If you are young, you might not have started thinking about retirement already. However, it is essential to understand that you will have an immense corpus the earlier you start saving for retirement. Also, if you know the compounding principles, you will understand the importance of time in the final amount you save. If you save regularly from a young age, you will not only have a financially healthy life; you will also be able to maintain your lifestyle after retirement easily.
We understand that it is not easy to develop the habit of saving, but like any other good habit, the advantages are so many that you must not ignore them. Wizely is committed to helping you on your financial journey.
If you wish to develop the habit of saving regularly check out our blog on ‘How to Get into the Habit of Saving’.
Follow our 'Saving Money' Blog Series:
How to Get into the Habit of Saving
4 Ways How Wizely Can Help You Save More