When you have a little bit of extra cash, it’s easy to want to spend it instead of saving it. Spending gives you instant gratification for purchasing something you’ve always wanted or for experiencing something new.
That instant gratification is what marketing companies are hoping you will continue to seek, and it can create a financial problem for people who are big on shopping and spending. While spending money isn’t always bad, it’s important to be mindful of your purchases and make saving a priority.
The reason is simple. Saving money allows you to have options in life. Below, I explore these options, showing you why you should consider saving some money instead of spending it.
5 Reasons To Save Instead Of Spend
#1. Save For Something Bigger
Think of all the money you spend on fast food or coffee each year. You will likely come up with a number that is in the hundreds or possibly thousands of dollars. It may seem insignificant to spend a few bucks here and there, but it adds up to quite a bit.
Saving this money could easily pay for a mini vacation or pay off a credit card. Small and frivolous purchases are often the most taxing on your wallet, and they are rarely even noticed.
Make it a priority to think about saving for something bigger. Set a savings goal and stop buying those to-go items that suck your wallet dry and spend the money on things that will actually have a positive impact on your life, like taking a vacation.
In the event you find that you still make these small purchases, and we all do, consider saving something each time you do spend. You can easily do this with Qapital.
It’s a free app that rounds up your purchases. The rounded up amount goes into a savings account for you to spend later. So far, I’ve saved close to $1,000 just by rounding up my purchases. You can learn more here.
#2. You Won’t Need Debt Management
If you have a chronic spending problem, you should consider taking some personal finance courses. They will teach you how to spend wisely, how to save, and how to use your money effectively. Once you master these skills, you will be able to save easily without spending unnecessarily.
The worst thing you can do for yourself is to get involved with a shady debt management company to help you out of debt. Most of these companies take advantage of consumers and once you pay off your debt, you find yourself right back in debt because you didn’t learn anything.
Take the time to learn the basics of personal finance, and you will save yourself a lot of time and headaches.
#3. Have A Fallback Plan
Creating a rainy day fund is always a wise choice. It’s important to save at least $1,000 as a fallback. Don’t worry if reaching that point is a challenge because I assure you it does get easier.
The first step is to take a portion of your monthly income and set it aside specifically in a savings account. You never know when you’ll need the money, and it could save you from getting further into debt later on.
The easiest way to set up an emergency fund is to create an automatic transfer from your checking account to your savings account and have the transfer occur when you get paid. Once you set it up, you save money all the time without any more effort on your part.
Another option here is the app Qapital which I talked about in a previous point.
Allotting money to an interest bearing account is a good way to save for emergencies. But you also need to save and invest your money in addition to this. You could use these investments for retirement, your child’s university, a new home, or a number of other things.
With that said, a great option for many is Betterment. They will automate your investing and follow time tested rules to help grow your money so you can reach your goals. You can learn more about Betterment here.
#5. Live Without The Worries
Happiness isn’t defined by the things you buy. People often use purchases as a way to define happiness, but it doesn’t work that way for very long. I know because I am guilty of it.
Years ago, I was buying things to make me happy. As I bought more things, the high I felt began to wear off faster and faster. The next thing I knew, I was buying more and more just to stay happy.
Before it knew it, I was in debt over $10,000. That added a mountain of stress to my life and limited me in many ways.
Learning to buy fewer things and spending money wisely is one way to be happier.
Saving instead of spending is easier said than done. Start with small steps to save the most money quickly. Work your way up. Cut back on purchases that are largely unnecessary and make wiser spending choices when you can.
Before you know it, you will be a master at saving instead of spending.
And as a result, you will have options in life. You can choose the job you want to work or even if you want to work at all. By having money saved, it opens up doors in life that otherwise were closed.