Why Saving is Absolutely Critical

Saving is absolutely critical in a down economy. Why? It’s simple — the more you save, the more options that you have. Now, we totally understand if you’re struggling to make ends meet and you find that there’s just not anything left over after paying the bills to save. But by that token, you should make sure that you have no cable subscription, no magazine subscription, no new clothes right from the high street, no big time haircuts or dye jobs… see what we’re getting at? Sometimes you have to pare down your lifestyle in order to get from one place to another.

A few years ago, I found myself on a pretty bad track. I was stuck between a rock and a hard place in my mind. I worked for a boss that I absolutely couldn’t stand. Trust me, the feeling was definitely mutual. He didn’t want anything to do with me, and I didn’t want anything to do with him. Work became a battlefield every single day. Yet I felt like I couldn’t quit my job because I needed the money to pay my bills. I lived in an apartment to die for — but my boss worked me so many hours that I never saw it!

I ended up getting very stressed out, very frustrated, and pretty tired. I wanted to do something, anything to stop getting that feeling of dread. Yet I didn’t think of the obvious: move somewhere else! I ended up living with my parents for a little while, and working a decent part time position. I also did a little bit of online side work.

It was something that ended up sustaining me, if only for a little while. I saved up enough money to have an emergency fund after I moved, which is a good thing.

So, let’s talk about that emergency fund thing. This is money that you should have as liquid as possible. After all, given with how shaky the economy is, you just never know when you’re going to have to tap it. Even though the banks give you a better interest rate for CDs and the like, don’t just park your money into one. A long term CD means that the money is locked away from you for as long as the term applies. Sure, you can break that but there’s going to be a penalty. How big should your fund be?

Your fund should ultimately become enough to cover you for a year. The power that you would gain from such a large emergency fund cannot be fully summed up in words. It’s really that powerful. You see, when you have the type of fund that lets you cover your bills for a year and then some, you get to do things that others do not get to do. For example, you will be able to travel around the world, if that’s what you really wanted to do. What if you desired to leave one career behind and open up another? With that type of money behind you, there really isn’t anything that you couldn’t do if you really put your mind to it.

Saving is absolutely critical because it gives you options. However, people get discouraged because it means that you’re going to have to work hard. You’re going to have to keep working hard for a long time, without seeing short term benefits. This is the part that people struggle with, because they are completely about the short term benefits. They want to get paid off in the short term and there’s nothing wrong with that, buy you’re going to have to give up that mindset if you really want to build the type of savings that you deserve. Other people don’t want to go without the stuff that they buy every single year. Sure, it’s nice to be able to treat yourself but if you’re trying to get out of extreme debt or change your life in some way, you really need to bear down and get things done. That’s just the way it is.

Believe in yourself. Believe that things can definitely be different. That’s the real path to success, at any rate!