I love saving money.
Since I was young, the thought of accumulating money facinated me. I had this ceramic piggy bank where I kept all sorts of coins. I would routinely check my balance by dumping the coins onto a table even when I haven’t deposited any money in the piggy bank! I did this for a while until I saved a decent amount of money and only spent this money on items I really wanted.
At the age of 14, I opened my first ever savings account. This was really exciting for me and I deposited money whenever I had any. When I started working part time at a grocery store, I started to make automatic contributions in savings and watched, slowly as interest accumulated into my account.
Savings accounts are not the best way to build wealth as any interest gained is taxable and has a hard time matching inflation rates. However, saving accounts can be beneficial if you are saving for something within the next 2 years such as a home or the purchase of a car.
The majority of people in our society never save for purchases or set goals for themselves. They live on impulse purchases and are followers to the media, hot trends, and their own pursuit of short term satisfaction.
Saving when you are young creates something very valuable when you are older.
savings create options.
Having options is very important to living the life you want to live. Some ways that savings equal options are:
Money set aside for emergencies:Having an emergencey fund will definitely help out in hard times. If you were to lose your job tomorrow how much of an impact would it have to you and your family without an emergency fund to protect you? 3-4 months worth of your salary is a great start in dealing with these types of situations and is a better option over accumulating debt by using your credit cards.
Putting your money to work in other investment vehicles: Having money set aside saves you from having to borrow money to invest and gives you time learning as much as possible to make smarter investment choices. Once you are ready to invest, you can simply transfer your saved money, into an on line discount broker account, RRSP, or even mutual funds from your local bank.
When Opportunities arise..:Maybe a house you have been following has dropped to a great price and you need to act now. Having the money saved for a down payment would be a great opportunity and you would be really grateful you had this money saved. There are a large amount of opportunities you can benefit if you have money saved for such occasions.
The bottom line is that money is mostly better saved than spent. Try to enjoy your life by being a little more frugal and appreciate such things as nature and helping others. You will feel better about yourself and from time to time, you can reward yourself for your good deeds with the extra money you saved.