Being Pocket Smart

GidifoodsNg

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Nov 12, 2020
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We save, basically, because we can't predict the future. Saving money can help you become financially secure and provide a safety net in case of an emergency.

Here are a few reasons why we save:

Emergency cushion - This could be any number of things: a new roof for your house, out-of-pocket medical expenses, or sudden loss of income. You will need money set aside for these emergencies to avoid going into debt to pay for your necessities.
Retirement – If you intend to retire someday, you will probably need savings and/or investments to take the place of the income you'll no longer get from your job.
Average Life Expectancy – With more advances in medicine and public health, people are now living longer and needing more money to get by.
Volatility of Social Security – Social Security was never intended to be the primary source of income and should be treated as a supplement to income.
Education - The costs for private and public education are rising every year and it's getting tougher to meet these demands.
Without money put away in savings and/or investments, you open yourself up to other risks as well. For example, not having enough money to pay for emergency dental care may force you into taking a loan that your savings might otherwise have covered.

We save, basically, because we can't predict the future. Saving money can help you become financially secure and provide a safety net in case of an emergency.


How much can you potentially save?
It’s important that you develop a budget using your net income as it reflects your take home pay after taxes and dedications. A common mistake people make is developing a budget off of their gross income. It’s a mistake because you're budgeting money you never possessed. Remember your potential savings is the difference between your net income and your expenses.

When developing a saving plan ask yourself these questions:

Are there any variable expenses that you can reduce or eliminate?
Is there anything you spend money on that you could eliminate and apply towards saving?
Tips for saving money:
Save windfall income – Any unexpected money such as income tax return money.
Collect loose change and deposit it in the bank – Use a piggy bank and deposit its contents when its full.
Try frugality – Purchase cheaper off brand items and save money. Also buying in bulk or participating in neighborhood food shares.
Break a habit – Try doing one less thing you expensive venture a week and apply that money to your savings.
Save lunch money –
Compare costs of major items before purchasing anything – Do your due diligence, shop around before making major purchases.
Buy on Discount Days – November and December are months of great discounts from Black Friday,Tech Monday and Christmas Sales;these are a great way to reduce living expenses.


Sources: InCharge Debt Solutions and the Federal Trade Commission
 
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