by Barry Tadmore

Created on: April 16, 2010

In a time when credit card debt is taking over so many people’s lives, it’s good to look at the benefits of saving money and to decide whether or not it’s worth the time and energy it takes to be disciplined enough to save money. 

The best benefit of saving money is that you will avoid having credit card debt in the future.  If you are in a position to save money every month, you are also in a position where you won’t have to use a credit card just to get by.  Too many people use a credit card when they don’t have the money to pay that credit card off.  But credit cards use compounding interest to maximize the amount of money they get from you.  Avoid them at all costs unless you can afford to pay them off every month.

Another benefit of saving money is that you’re planning for emergencies.  If your furnace breaks down and you need to buy a new one, do you have an extra $5,000 for that new furnace?  If you don’t have the money for it, you’ll need to finance it.  Paying interest adds to the overall cost of any big expense.

The simple fact of saving is that you never know what the future will bring.  When my wife and I moved into our house, we had three big costly problems happen within the first three months of our move.  First, our basement flooded and we needed to fix the foundation of the house.  Second, my car broke down and it cost $2,200 to fix.  Third was a power vent that broke on our roof.  In total we spent over $3,500 right after moving into the new house.  Without savings, we would have had to use credit cards and would have spent much more money on all of those items after calculating interest.

Saving money is hard, though.  It’s easy to spend the money that is in your checking account every month even though you should try to keep some of it to the side every month so you can put it in savings.  That’s why it is important to pay yourself first.  Make sure that before you pay any bills you put money into your savings account.  Then when your bills are paid you know you can spend the remainder of what is in your account.

The benefits of saving are plentiful.  Just remember that it is worth the time and energy!

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