Savings is ‘an economy of, or reduction in money, time or another resource’. It is the money you have kept aside, especially through a bank or official scheme’
Whichever way you look at it, we can safely say that it is an action taken today for the benefit of a near future seen or unforseen.
Importance of Savings
In recessionary periods like this, where business are disrupted and movement restricted. The bills keep piling up considering all the financial obligations one is up against – the idea of saving might seem crazy.
No matter how hard or impossible this might seem, saving money is always worth the effort in the end if you work at it. It is one of the most reliable ways of improving your financial situation and status over time.
Sometimes, your savings appreciate with little interest or none at all, especially when you consider inflation and tax attached to it, as opposed to investments that have a slightly higher interest rate.
Anything is better than no savings at all or going into credit, which will probably cost you up to 15% to 35% or more in interest annually. Remember, recessionary periods aren’t forever.
Benefits of Savings
It’s got countless benefits, with each one uniquely serving its own purpose to a goal. But we have selected a few that are worthy of mention:
- Peace of mind: This is very important as we all can relate to the peace of mind that comes with having some kind of backup plan. As you save over time, your financial worries diminish.
- Your money works for you: We spend most of our days for however long working to earn some money. It is not a bad idea if you sometimes sit at the comfort of your sofa and let your money work for you. When you start saving over time, then your money starts working for you.
- You have money set aside for emergencies: This needs no introduction, we all have experienced a life-saving experience where our savings came to the rescue. Our savings is also our first point of call during emergencies. Even when you don’t have one, you keep thinking about it and wishing you had.
The key to financial freedom is not your salary or loans but your savings. For instance, keeping N1,000 away every day for 10 a year will give you N365,000 at the end of the year.