Right from adolescence we’re told to save money because this material world runs because of it. If we don’t have it, we are as good as buried alive. Adults who shell out this crucial life advice regarding savings, often don’t give a rational explanation about why they are important. A common explanation which they give is- “Money doesn’t grow on trees”.

It’s an obvious thing, that money doesn’t grow on trees and thus this advice is vague in the context of savings. There are many reasons why one should save, though seldom are they spoken or written about.

A large part of the society generally looks down upon savings, with many deeming it as penny pinching. While savings do force us to limit our spending, it is far from penny pinching. Savings are what aids one in navigating the tide of life.

So why Savings are important ? Let’s break it down in 3 steps –

  1. Savings protect us from life’s habit of throwing uncertain surprises at us

Life as we know it is full of surprises. Some are pleasant, some are tragic. Pleasant surprises generally mean good news, but those uncertain and tragic surprises are what causes us misery.

A tragic surprise can be the sudden death of a sole earning family member, heavy losses, job loss or outlier events which cause economic and societal damage globally like COVID. It is during these times, savings come to protect us.

Events outside our control are happening all the time and without money in the bank, suffering is inevitable. A sudden job loss without you having enough savings in the bank can make you broke, or a heavy loss in business and no savings in the bank can cause your family to fall into jeopardy.

No one wants to face these scenarios, but life does not always work in our favour. These scenarios are bound to come and to face them one must be prepared. Savings are the foundation for preparation and a shield during turbulent times.

  1. Savings open up future possibilities

Possibilities don’t get created on a whim. They take time and careful planning. Money drives our life, which makes sense why having it enough in the first place helps in creating possibilities. But how does this happen ?

Take an example- Suppose you want to quit your job because you hate it and want to start your own business. This can only happen, if you have enough money in the bank, as savings. If you don’t have enough savings, naturally you won’t be able to quit your job and thus you’ll be forced to carry on doing what you don’t love.

Your possibility to start your own business won’t materialize and thus an opportunity will be lost. This where savings play a critical role. They aid us in creating multiple possibilities, saving our time, which proves that money saved is always better than money drained.

  1. It is the foundation for investing

So you want to grow your money and become wealthy. Well how are you going to do it, if you don’t save at all. Yes, life is meant to be lived but what is the point of living a mediocre life. A great life, filled with riches is only going to manifest if you invest your money, and savings are required for investing.

The great investor Warren Buffet once, said –

 “Someone is sitting in the shade today because someone planted a tree a long time ago.”

Investing is similar to planting trees while shade is the reward, which one gets from it. Though in order to invest and grow, savings is a necessary tool for reaching your goal.

So remember this, whether you are a janitor, cashier, entry level employee or a businessman/businesswoman, Savings are capable of fulfilling your dreams. The choice to make your earned money work, or go bust is always with you. Choose wisely.

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