Saving – it’s one of those behaviors that is really tough to accomplish these days. But, conserving a bit of coin, stashing a bit of cash, banking the dollars away can add up over time. We all know that, but I thought it would be worth repeating again. Why? It’s because there are so many reasons to save.
If I could go back in time, I certainly would have stashed more away than I did. (I know, wouldn’t we all!). There are those, however, that find every opportunity to find the angles to save. The other day when I was at the grocery store, I saw this women pull a pile of coupons from her purse. And, I mean, there was a pile of them. I mentioned something to her. She smiled broadly and said she’d taken a class about how to maximize couponing.
It made me think again about some of the reasons why adults purpose to save money. I remember reading a newsletter that was produced by the ABA Education Foundation. It was designed to share savings lessons. On the last page it highlighted the top five reasons people save for the long-term. Here they are: (1)
#1 Purchase a home
#2 To send their child to college
#3 For a once-in-a-lifetime trip
#4 For emergencies or a “rainy day” fund
#5 For retirement
Have these reasons changed? Where are you along your money life? Are any of these reasons applicable to you? If I had to put these in order of importance, at least from my perspective, they would be as follows:
#1 For emergencies or a “rainy day” fund
In my opinion, this is the most important. Without a “rainy day” fund, you may be forced, in time, to access your retirement funds. (I know long-term unemployed individuals who have tapped into their retirement funds to pay the bills.). It’s best to have extra money sitting safely and accessible should the worst-case scenario happen!
#2 For retirement
As we have talked about before, we are living longer. Candidly, no one is promised perfect health their senior years. You want to make certain you’re protected financially should you not be able to work.
#3 Purchase a home
The best practice, no matter what your income, keep the house selection conservative. Too much of anything can become a burden and weigh you down. It’s nice to remain more flexible and live beneath your income.
#4 To send their child to college
When I attended the Financial Literacy Summit (2014) at the Federal Reserve Bank of Chicago, the discussion came up of starting to become creative regarding education. Parents and their children will have to find other avenues to approach continuing education due to the cost.
#5 For a once-in-a-lifetime trip
As appealing and exciting as a fun trip would be, realistically it should be the last on the list. We are living in different economic times these days. In reality, a conservative, more sensible approach to money decisions is the flavor of the day.
Saving is an important part of every person’s money lifestyle. It’s time to consider our priorities. It’s time to be making conservative choices. What do you think?
No homework today!
(1) ABA Education Foundation’s Teach Children to Save program