Savings?
Filed under: Hmmm
I guess savings are important at all times, but nowadays more than ever. If you had thought savings were important previously then you are probably doing alright in these current economic times. Savings are good because in general it eliminates debt and if you have substantial savings then you probably do not have substantial debt. Many financial people recommend paying off credit cards first before saving because they incur a higher rate than the savings rate you might get for your savings. In other words, the amount you pay on your credit debt, the percentage, will be higher than the amount you might get on your savings or investments. The percentage your money makes for you will be lower than what the percentage on the debt takes away from you.
It makes sense, I guess. I’ve seen it but what is forgotten is the human factor. I think that, weird as it may be, saving a bit will actually make your debt easier to get rid of. If you save each month and see that savings grow you feel better about yourself and your situation, also if you are diligently paying your actual debt down you feel twice as good. Sort of a self enforced happy loop, it can keep you feeling positive and make you feel like you are really accomplishing something. Besides, the discipline needed to save is the same you use to pay things down and not incur more debt. You are building your self worth, your financial worth and your discipline which in the short and long run will only be of benefit to you in your life.
Savings is important in many ways, allowing you to be independant and more in charge of what you do or don’t do. Knowing you have money in the bank or as some do in your matress makes a big difference in how you feel about yourself. I don’t want to get into investments but think about this, if as some are claiming, things are horrible then what are you going to do with your money anyway? Chances are very good things will get better, and investing now or saving now will only help you.