We all know that saving money is an important financial goal. In this brief video, Fool contributor Chuck Saletta spells out three of the most important reasons why saving is such a critical part of each and every financial plan. Those key reasons are:

  1. You have to save for your money to compound for you.
  2. Having savings gives you flexibility when you need it.
  3. The more you save, the less you need to save.

What 20 years of saving/investing can get you

Monthly Savings0% Annual Returns3% Annual Returns6% Annual Returns9% Annual Returns
$0 $0 $0 $0 $0
$100 $24,000 $32,830 $46,204 $66,789
$250 $60,000 $82,075 $115,510 $166,972
$500 $120,000 $164,151 $231,020 $333,943
$1,000 $240,000 $328,302 $462,041 $667,887
$1,500 $360,000 $492,453 $693,061 $1,001,830

Table from author's calculations.

Chuck Saletta is a Motley Fool contributor. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.