Saving

Why Save?

Everybody likes to save money on purchases, don’t they?  But saving money, as in delaying or abandoning a decision to purchase something – a behaviour often referred to as delayed gratification – is something that fewer people choose to do.

Saving money in this context has a number of benefits.  Firstly, building up a pot of savings provides some measure of security – a ‘safety net’ which one can fall back on when usual sources of income reduce or disappear. This provides peace of mind and reduces stress.

Secondly, money put aside as savings can earn interest, meaning that savings will grow over time.  The higher the rate of interest and the longer the period over which it is earned, the greater the savings pot becomes.  The ‘compounding’ of interest, where interest itself earns interest, can yield some startling results.  Essentially, this compounding of interest is the secret to building long term wealth.  Click here to see it in action!

The greater one’s savings, the more options we have when it comes to using them, whether this is through the goods and services we subsequently buy or how we chose to spend our time.

Consider this last point for a moment. How many of us would carry on doing the things we do at the moment if we had more money? Maybe there’s another job you’d prefer to do that doesn’t pay as well which you know you’d find more rewarding in other ways. Perhaps you would consider working part-time or even retiring early? Life’s too short to spend time doing a job you hate just because you need the money.

If you’re looking to earn a higher rate of interest on your savings, visit the MoneySavingExpert site for some ideas.

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