You’ve probably heard it from mom and dad a thousand times: “You should save your money!” If your parents are not clear on exactly why saving is so important, though, here’s a breakdown of some of the major reasons you should listen to their advice.
- Saving lets you eventually buy things you might not have enough money for right now.
If you’re a typical kid, the money you get from chores, an allowance or a job like babysitting probably doesn’t cover everything you want or need. You might feel like certain items are unaffordable because of this, but that’s not necessarily true—they can be within your reach if you simply wait and keep setting money aside toward your purchase. In this way, saving changes “no, you can’t” into “you can, but later.”
- Saving can keep you out of financial trouble in emergencies.
When people make a budget, they usually do a good job accounting for things that are predictable, such as rent or car insurance. They’re not as good accounting for unexpected expenses, such as suddenly losing a job or having medical bills insurance won’t cover. If you run into these kinds of costs, borrowing money is an option, but it’s not a great choice because lenders usually charge you fees, such as interest, to do it. If you save some money, you can draw from the cash you’ve put away instead and avoid debt.
- Saving means self-reliance.
Admit it. You don’t want mom and dad to control everything you do. (Congratulations, you’re normal!) If you save your money, you don’t have to rely on your parents or anyone else to handle your purchase. This fact doesn’t mean their opinion no longer matters. It simply means you can take some financial weight off their shoulders and carry it yourself, earning some independence.
- Saving offers greater financial freedom for the future.
Saving sometimes means that you spend less for a purchase. For instance, if you save up and are able to pay cash at a car dealership or put more money down on a house, the lender usually will give you a better deal that’s not so expensive, as they’ll associate the cash or larger downpayment with less risk. You can use the money you don’t spend in these kinds of situations on other items you might want or need, so you’ll likely have more choices about what to do.
Saving also can give you freedom in that it can put even more money in your pocket. For instance, if you put your money in an interest-bearing bank account, the bank actually will pay you a small sum based on your balance. Similarly, if you use your savings to buy stock in the stock market, you might be able to sell those stocks at a profit.
- Saving can make you happier.
Money can’t buy happiness, per se, but if you’re more independent and have more choices available to you, you probably won’t feel as anxious, depressed or unsatisfied. You also can feel great about the fact you set and met your money goals, especially if those goals involve helping other people.
- Saving helps you see what’s possible.
Although some saving relates to addressing emergencies you might not want to think about, saving also connects to positive goals. For example, maybe you’ve always wanted to take an art class or go on a vacation in another state or country. When you save, you learn to see the world and your life for what they could be, not for what they are. That way of thinking is a big key to staying inspired, motivated and strong.
Saving is something every kid should do. It lets you buy items that otherwise might be out of reach, keeps you out of financial trouble and makes you more independent. Often, it means you can do more, as you have more choices or get additional cash. Subsequently, you can feel happier. Most importantly, saving gets you to keep your eye on your dreams. Set goals. Look ahead. With saving, you can make things happen!