Why do you need to save money? Well, let us count the ways. First, in the short term, almost half of all Americans couldn’t raise $400 if they needed it for a sudden emergency. The fact is, life is full of sudden emergencies, from car repairs to sprained ankles. You need money to take care of life’s unexpected twists and turns.
So the first reason to save money is to have it in case of sudden-and-unplanned-but-necessary events. Without this kind of cushion, you’re going to have to turn to credit cards or a personal loan when you need extra cash. Debt repayment on these, in turn, can impair your ability to save long term even more, so you wind up falling further and further behind.
Second, the achievement of future plans, from a down payment on a home to retirement, require consistent savings. You need a savings plan to realize your long-range financial goals. If you’re spending every cent you earn, you’re not going to have much luck attaining your financial dreams.
Third, there’s no reason to spend money unnecessarily, so keeping an eye on ways to save will let you live well, but without paying more than you need to. That’s a recipe for good financial health overall.
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