Saving Money

Why save money?

Ever since forms of payment were created such as silver and gold coins to paper cash, money has determined a person’s standard of living. It allows a person to take money-related expenses and decisions with a peace of mind such as going to the movies, extra groceries, and ultimately leniency. Financial freedom is an idea that all people strive for in today’s society with debts and non-controllable expenses. This financial freedom can be reached through saving money for important expenses, investing money for self return, and budgeting.

Saving Money

The desire for certain wants for young adults could mean high expenses. To control this type of desire, it is very important to keep your emotions under control and clearly think about whether this certain expense is valuable as of right now and how this would later affect your future expenses and savings. Emotions are the leading factor for impulsive decisions in various scenarios. Therefore, in order to take these valuable decisions to determine a part of your financial freedom, it is key to keep your emotions under control and clearly analyze if this decision would do you any good later in the future. Every decision made in the present affects your future.

Budgeting

Keeping a certain amount of money from your income towards your needs is very important. When budgeting some main categories that should be involved are:

• Housing

• Food

• Transportation

• Utilities

• Savings

• Miscellaneous

As a good portion of money is being put towards these basic living needs such as food, clothing, and shelter, it is also very important to put around 15-20% of your income towards savings. Savings could mean emergency costs and any last minute or future large payments that need to be made. As for students and young adults, main budgeting categories would be slightly different such as:

• Tuition

• Rent

• Student Loans

• Miscellaneous

Budgeting is overall very important as it avoids debt and creates a stable plan to where there is no fear of being financially unstable. Especially for young adults, money might not be something that is being received constantly through a job or another form of passive income. In this case, understanding how much of your money to spend for certain needs is key to making sure that you do not fall into a money crisis and stay financially stable.

Overall, money is a lot more difficult to keep close to you rather than to spend as it is always right in front of you. Therefore, in order to wisely spend and avoid any financial crisis such as debt and financial instability, it is very important to keep your emotions in check when it comes to valuable decisions and create a budgeting plan no matter how young you are. This allows for more control over your decisions, expenses, and overall a more stable future.

Definitions:

Standard of Living - the amount of money a person has and how comfortably they can spend.

Financial Freedom - the amount of wealth a person has that considers them to be free of financial burdens.

Works Cited

10 budget categories that belong in your plan. Quicken. (2021, July 23). Retrieved September 11, 2021, from https://www.quicken.com/blog/budget-categories.

Better Money Habits. (2021, May 5). How to save money - 8 simple ways to start saving money. Better Money Habits. Retrieved September 11, 2021, from https://bettermoneyhabits.bankofamerica.com/en/saving-budgeting/ways-to-save-money.

Budgeting tips for students - great lakes. My Great Lakes. (n.d.). Retrieved September 11, 2021, from https://mygreatlakes.org/educate/knowledge-center/successful-budgeting.html#:~:text=Budgeting%20is%20important%20for%20your,credit%20card%20bills%2C%20and%20entertainment.&text=Budgeting%20ensures%20you're%20not,%2D%20and%20long%2Dterm%20expenses.

SoFi. (2021, July 11). Why saving money is important. SoFi. Retrieved September 11, 2021, from https://www.sofi.com/learn/content/why-saving-money-is-important/#:~:text=Saving%20money%20is%20highly%20important,of%20working%20and%20savvy%20saving.

Tiaa. (n.d.). How much should I save each MONTH? Authored by PAULA Pant. TIAA. Retrieved September 11, 2021, from https://www.tiaa.org/public/learn/personal-finance-101/how-much-of-my-income-should-i-save-every-month#:~:text=More%20is%20fine%3B%20less%20may,you%20to%20budget%20your%20money.

What is budgeting and why is it important? My Money Coach. (n.d.). Retrieved September 11, 2021, from https://www.mymoneycoach.ca/budgeting/what-is-a-budget-planning-forecasting#:~:text=Since%20budgeting%20allows%20you%20to,you%20are%20currently%20in%20debt.