When asked, people will mostly comment that having credit is better than saving money. That is why people prefer using their credit cards when purchasing things though they will still have their credits and interests in the feature. However, it is about time that people save money, and there are a number of reasons to do this.
IT IS ONE STEP AWAY FROM BECOMING FINANCIALLY INDEPENDENT
People have differing notions on what being rich is. However, for some people, it is becoming financially independent and having their own savings. in this case, financially independent people knows how to use their money and can make financial decisions without necessarily worrying about what will be left from their pay checks.
Financially independent individuals can indulge in certain luxuries, such as vacations, and are capable of making investments on businesses that appeal to them. Moreover, they need to look for high-paying jobs. In fact, they may choose a career that is of great interest to them. In addition, financially independent people do not worry about retiring in the future.
Being financially independent does necessarily indicate that a person should be rich but just having enough to be not financially worried.
SAVE 24% ON GROCERIES AND 50% ON OTHER PURCHASES
When people use their credit cards to pay for things and fail to pay in full, interest rates and additional charges may lead to 50% extra fee. Thus, people should monitor how they use their credit card to avoid incurring additional financial burden.
However, when people have savings, they can buy things and make appropriate spending decisions. And during sales, people can buy extra supply of groceries. Some experts note that such buying more groceries save people one trip to the grocery and 24% on total grocery bill.
PURCHASE A HOUSE
When buying a house, people normally borrow money for the bank. However, banks will not approve their loans if they do not have the necessary down payment. This problem can be remedied if people have savings that they can tap for their down payment.
PURCHASE A CAR
Same as when purchasing houses, buying a care also necessitates down payment before people can ask banks for car loans. Though people may use their credit cards for their down payment, it will lead to an additional 20% on their interest rates. Thus, individuals should just save as much as they can for their down payment before considering going to banks for car loans.
Saving money is effective method of decreasing debts and eventually eliminating them completely. Meanwhile, people will never finish paying off their credit card fees if they constantly use these plastics for emergency purposes.
However, before people should start paying their credit card debts, they should first allot some money for savings. This money should serve as reserve funds so that they won’t have to use their credit cards in case of emergencies.
SAVINGS CAN BE USED FOR ANNUAL EXPENSES
People will feel more financially-stress-free when they have enough money to cover their annual expenses, including expenses for gifts, vacations, car maintenance, home and appliance repairs, and taxes. In some cases, people resort to refinancing their mortgages to pay their debts or using another credit line to pay high-interest cards. However, they are financially endangering themselves as they do not really finish paying any of their debts. Thus, people can save in advance so they won’t have to worry about their future expenses.
Savings can be tapped during undesirable circumstances, for example, when home or car repairs are extremely needed. When people have emergency money to be used, they won’t have to go the banks for emergency loans.
It is inevitable that families may face certain emergencies, such as unforeseen health issues, car accident, or weather disasters. As expenses for emergencies cannot be accurately estimated, it will be of great help for people to save for such unforeseen circumstance and to avoid burying themselves deeper into their debts.
IN CASE OF LAY OFF OR ACCIDENTS NECESSETATING BREAK FROM WORK
Most people who are comfortable with their jobs feel like there’s nothing to worry about regarding their safety. However, accidents or other events that require people to take some time off can still happen. In such cases, people cannot use their employment insurance not until six weeks after they have taken leave from their jobs. Living on credit while they are out of job can only make things worse as people are incurring debts but they have no means of earning money to pay for them.
LIVING A GOOD LIFE
Truthfully, money affects emotional, psychological, and physical well-being off people so it’s not too wrong to aspire for financial-stress free life. The first thing that people must do is to save money for their future. If they still use their credit cards without thinking, they should start monitoring where their money goes and prepare budget plans to pay off their debts and at the same time increase the amount of their savings. You will be able to afford things like Botox and Body Contouring.