The importance of saving

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The importance of saving

Published by sam - 26/03/08 - 08:03:15 am

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Building wealth requires that you consistently save money over the years. Besides being one of most effective ways way to achieve true wealth there are three other important reasons why every Filipino needs to save.

1. Survive a financial crisis

Sooner or later every family has to face some sort of financial crisis. This financial crisis could be in the form of accidents, illness, loss of employment, failure of a business or sudden death of the family’s breadwinner. The amount of savings the family has will ultimately determine how well they can cope with a financial crisis. You may survive with little savings but chances are you will get into debt that could take years or even a lifetime to wipe out.
Sometimes the lack of savings can even make the situation worse, like a family member dying unnecessarily due to lack of funds for proper medical care. “Saving for the rainy days” will spare your family from huge financial losses and ensure your survival when a crisis strikes. You will have peace of mind and you can sleep better at night knowing that whenever a financial emergency comes your way.
2. Improve the lives and economic well-being of the family

It is nearly impossible to buy anything of high value if you do not have any savings. Adequate savings can help you buy a nice, decent house, a car, pay for your children’s quality education or allow you to invest in a business. While it’s true that money cannot buy happiness, it can certainly buy things that will improve the quality of life of your family. It also allows you to indulge in occasional simple pleasures that promote family bonding.
It can also do wonders for your marriage. Many couples quarrel and even break-up over money matters. With a healthy level of savings there would be one less important thing to argue about. It is alright to aspire and work hard to become wealthy so you can give your family a good, but not extravagant, life.
3. Enjoy your golden years

With great advances in medical & health care and greater awareness about fitness & healthy living, many of us can expect to live to a ripe old age. It would be such a pity if you just leave it up to the government to take care of your needs once you have retired. It is also unfair to your children and relatives to obligate them to support you when you grow old. The money you’ll get from SSS or GSIS will barely feed you and you could find yourself working way past the age of 65 (or totally dependent on your children) if you do not prepare well for your retirement.
Today, it is common to see individuals in their late 60s or 70s still working for a living. A lifetime of saving would have spared them from going through this ordeal in their twilight years. The only way to ensure that your golden years will shine is for you to start building TODAY the funds you will need for the future. Starting early will allow you to retire early, giving you more time to enjoy the fruits of your hard work.

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March 26, 2008 | Financial Planning |

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