Three Reasons Why You Should Save

Hi All,

One of the objectives of this blog is to stimulate discussion about how to achieve financial security. One great way be financially secure is to save money. Saving has been on a decline since the mid 1970s, but for the average person, it still makes a lot of sense. Here are three solid reasons why:

1) Upward Mobility: Economics isn’t an exact science, but its pretty clear that persons with high incomes save more. There is some disagreement on this, but more saving probably results in higher incomes and greater wealth. For example, higher saving rates allow one to acquire assets like dividend producing stocks, real estate or education. They also allow one to pay down debt, effectively freeing up income. The end result of this processes is obvious: increased wealth and prestige. So, savings often signal a processes of wealth creation that results in upward mobility and increased net worth.

2) Increased Safety: Savings means less susceptibility to temporary income loss. In this case the logic is obvious, the more savings you possess, the less you have to worry about getting sick, injured or being laid off. This is the reason why most personal finance gurus recommend that you lay in an emergency fund.

3) Less Stress: The more money you’ve got, the less stress you should have. While a lot of people who have money still worry, objectively speaking if you have a healthy savings account, then you have less need to stress. So, if you have some concerns about your financial situation, saving can greatly help alleviate the source of that worry.

Best,

James