Introduction to Saving

Saving money is one of the essential aspects of building wealth and having a
secure financial future. Saving money gives you a way out of the uncertainties of
life and provides you with an opportunity to enjoy a quality life. Putting aside a
sum of money in a systematic manner can help you steer out of many hurdles and
obstacles in life. It can support you in your hour of need and ensure that your
family has something to fall back on in case of an unfortunate event.
Saving is income not spent. Savings is the balance that remains after meeting of
the consumption needs of an individual. Savings are kept in the form of cash or
cash equivalents (e.g. as bank deposits), which are exposed to no risk of loss but
also come with correspondingly minimal returns. Savings can be grown through
investing, which requires that the money be put at risk, however. People may save
for various life goals or aspirations such as retirement, a child's college education,
the down payment for a home or car, a vacation, or several other examples.
When we talk about savings, we mean the money you put away and do not spend.
The idea is to use it sometime in the future to buy something such as a car, a
holiday or a house, or go towards emergency unexpected costs.
It's something which you do overtime. For example, by putting away a certain
amount each month into a savings pot or account when you get paid.
Reasons why saving money is important
Everyone should save. Doing so can give you peace of mind in the short term
should you need to pay for something unexpected. It can also be a way to help
you achieve mid to long-term goals.
The sooner you start saving, the more money you will have put away for things
you may want to use it for later. This could be buying your first house, paying for
a big life event such as a wedding, or, if you are thinking long-term, your
retirement!
Savings is crucial for everyone, regardless of their earnings, spending and life
stage. Here are some reasons why you need to start saving.
 It offers peace of mind: Knowing that you have a certain amount
accumulated for times of your need, gives you peace of mind. You can lead
a stress-free life with the knowledge that you will not have to struggle if
things take an unexpected route.
  It gives you a better future: Your savings can be the answer to a number
of your goals. You can buy a house, accumulate funds for your retirement,
or purchase a vehicle. You can secure your future, indulge in the best of
things that life has to offer and live a very fulfiling life.
 It provides for your children’s education: With a considerable amount
of savings, you can fuel your children’s dreams and pay for the best schools
and colleges across the world.
 You can plan your short-term goals: Savings are not just aimed at the
long term. You can also benefit from savings in the short term. A lot of
people save for a few months and then travel.
 It gives your family security in case of an unfortunate event: By saving
in a disciplined manner, you can make sure that your family is well-
provided for. In unfortunate times, your savings can act as a cushion for
your loved ones and help them overcome any financial difficulty.
Tips to enable savings
If you are new to savings or find it difficult to stick to your objective of saving,
then you can try the following steps.
 Limit your credit card usage: Credit cards may provide a temporary
sense of relief, but the high rates of interest can deplete your savings in no
time. It helps to limit your debt and restrict credit card purchases to ensure
that your savings are intact and growing.
 Keep a track of your expenses: If you find it difficult to save regularly,
try to record and keep a track of your monthly expenditure. This will offer
you a clear picture of where you spend. You can then identify the things
that are not important and aim at saving more by avoiding those purchases.
 Create a budget for savings: It helps to devise a budget for each month.
You can create a plan at the beginning of the month to target savings and
set limits for spending. This lets you focus on what is important, reduces
the chances of over-spending, and lets you save as planned.
 Invest in long-term financial tools: When you save, it is also important
to see your savings grow with time. Investing your money in a long-term
investment plan can have many additional benefits. These plans offer a
lucrative rate of interest that lets your money retain its value and beat
inflation.
Saving vs Investment
When you're saving you are putting money away little by little. For instance, into
a savings account, and building it up over time with little to no risk.
With investing you are using your money with the expectation of generating more
money than what you first put in. You can invest in lots of different things such
as a business, property, funds, trusts, stocks, bonds and much more!
Another type of investment is a pension. The main difference is that investment
usually carries more risk because it has the potential to grow your money faster.