While you’re doing the hard work of repairing and building your credit consider for a moment what your overall goal is in doing so. Is it merely to raise up your credit score so you can make a big purchase?
Don’t worry if it is, you’re not alone. In our credit repair agency, we serve many families and individuals who simply want to buy that car or get approved for a mortgage with little thought about what comes next.
And while that goal isn’t terrible, it could be expanded a bit. What if your goal was to increase your overall financial health for a lifetime? Sounds a bit better, right?
It’s a passion of mine to not only repair credit for those who need it but also to share my knowledge and experience here. Knowing what is possible is so freeing for people.
So, one of the best things you can do for yourself is learn the skills of saving money. Saving money is especially helpful while you are building your credit.
10 Benefits of Saving Money
1 | Saving Money Is Making More Money
When it’s saved, your money is making even more money for you. Even if you just have your money in a regular savings account, your money is still earning interest. If you save it, it will grow!
But if you go a step further and save your money in a high-yield savings account.
Given the difference between high-yield savings account rates and the national average, the increase in earnings is significant. If you’re holding $5,000 in savings, for instance, and the national average is 0.10 percent APY, you would return just $5 over the course of a year. If you instead put that same $5,000 in an account earning 2 percent, you’d earn $100.
Investopedia
Related: Free Money Hacks to Increase Your Income
2 | Saving Money Serves You in Crisis Moments
We prefer to think nothing terrible is going to happen, but sometimes it does. We lose jobs, have house fires, or car accidents. Our pets get sick or our wallet gets stolen in a foreign country.
Life is unpredictable, so having a good chunk of money to lean on, just in case, is going to ensure that the bumps along the way aren’t game-changing. Just always make sure when you take out a loan from yourself that you pay yourself back. You are worth it!
3 | Saving Money Helps You Have More Fun
Additionally, many people think you have to make a choice between saving money and having fun, but this is a fruitless mentality. In fact, fun is a critical part of personal finance, and it is essential for your financial and physical well-being.
Truthfully, you should always set a little money aside for enjoyment like planning a vacation or buying something that really brings you enjoyment. And when you have savings, you can do this guilt-free, and without any worry that you are harming your financial future.
Putting away money gives you the freedom to do what you want to do. And sometimes that means having a little fun.
4 | Saving Money Keeps Anxiety at Bay
People who live paycheck to paycheck, barely scraping by, and saving nothing, feel tremendous amounts of stress and anxiety. In other words, there’s no other pressure on Earth like money pressure. If you’ve experienced it, you know.
When you don’t have any money, you constantly worry about it and it interferes with your ability to get through each day happily. The stats are there. According to the American Psychological Association, the number one thing Americans stress about most is money.
Another survey suggests that 57% of divorces are the result of money stresses. If you’re married, you also know the impact money pressure can have on your marriage.
5 | You Can Buy What You Want When You Need It
New car, downpayment on a house, or a new computer all cost a chunk of change. When you have a savings habit, these things can be made possible after a little bit of time stashing money away.
You are also in a better position to pay cash for what you need and therefore save more money. For example, if you need new furniture and are paying cash, you can take advantage of better deals than those who are dependant on financing.
6 | Saving Money Gives You Peace of Mind for Your Future
If you are saving for your retirement and even investing your money to take advantage of compound interest, you are taking care of your future self.
As you get older, there’s a reasonable about of stress associated with how you will life after you retire. Having a savings plan for your retirement is literally a gift you give to yourself.
7 | Saving Money Can Help You Help Others
Do you know what happens when you save money wisely and invest intelligently? Your money grows. And when your money grows, your opportunity to help others financially grows with it.
Consider this: if you give 10% of every dollar you earn to charity or your local church, and you don’t have any savings or investments, your ability to give is limited by your annual salary. In contrast, if you save and invest your money, your ability to give will grow exponentially with compound interest.
8 | Saving Money Helps You Learn Greater Discipline
One of the most important lessons we can learn from saving money is greater self-discipline. It can be a challenge to teach yourself impulse control when everything is just a click away.
However, you have to learn how to say no if you want to boost your savings account. Enforcing self-discipline and hard rules for spending form good habits.
Furthermore, it sets a strong example for your family. Saving money is a valuable skill you can pass on to your kids. Self-control is also a skill that transfers into all areas of your life.
9 | Saving Money Builds Confidence
Setting a goal and achieving it can give your confidence levels a real boost. The bigger the goal, the more confident you feel after reaching it and the higher your self-esteem. This is true for any goal, including your savings goals.
If you haven’t seriously saved money before, start small. Set easily achievable goals in order to increase your confidence and help yourself develop the self-discipline needed to accomplish bigger goals.
After you’ve crushed savings goal after savings goal, you will have no doubt in your mind that you have the discipline to keep going toward saving more money.
10 | Makes You Feel More Optimistic and In-Control
When you feel confident and have less stress in your life, your overall view of life tends to be more optimistic and happier. You also feel more in control of your life versus feeling bounced around by random circumstances.
As you’re building your savings account along with your confidence, you’ll start feeling less like life is a never-ending cycle of living paycheck-to-paycheck, and more like you are in control of your money and your life.
You’ll be able to see your savings goals with a longer-term lens, meaning you’ll end up being less impulsive in your spending. When you’re less impulsive you tend to feel like you have more control over your finances and you’ll feel less anxious overall.
As you can see, there are many pros to saving money, and there’s really only one downside and that is living on a tighter budget. Can you cut things out of your spending for all of these benefits? It seems like a pretty good trade-off to me!
