Top 5 Reasons Why We Need to Save

Everyone wants to achieve financial freedom. We all want to be wealthy. Thus, we ride a vehicle called a job or business in order for us to earn income. This income provides temporary security and helps in paying our bills. The income we earned goes to spending and/or saving. However, because we are already exposed to spending money even at an early age, majority of our income goes to spending and there may be little (or none at all) left for saving. Thus, it is a must that we should also consider the importance of saving money. Here are the top 5 reasons why we need to save and why it is important to realize and start saving before it is too late.

We need a reason to save money
We need a reason to save money
1. Retirement
Nobody wants to work for the rest of his life. It is therefore imperative to think about retirement as early as possible. In fact, our mentor said, “The best time to prepare for retirement is the first day of your job.” It may sound ironic but it makes sense. Because people often delay preparing for retirement, a lot of Filipinos retire broke. Majority of Filipinos are supported by their children, most are supported by charities, some are still working, few are living off pension and very few are financially independent. 

Who do you want to take care of you? (1.) your children? (2.) your company? (3.) the government? (4.) or yourself? You are the best person to take care of your future self. Take charge of your future. Start saving now!

A sad reality: we need to save for retirement
A sad reality: we need to save for retirement
2. Kid’s Education
The best investment we can give to our children is education. Basic education, high school and college are the important levels our kids must undergo to give them the best future ahead. Among the 3 levels, college tuition fees are the most expensive. Therefore, it is something that we must also prepare if we want to provide the best for our kids. Tuition fees in the Philippines are expected to double every 7 years. Assuming that you have a 2 year-old son with a current 30K tuition fee per semester, by the time your kid reaches college, the tuition fee will then become 150k per semester. That is for 1 semester only. Multiply it by 2 semesters per year, multiply it by 4 or 5 years for the whole college duration and multiply it by the number of kids you want to have – I guarantee you it is a number you don’t want to compute.

3. Future Expenses
This is the usual reason why people save: saving to spend. This includes buying a gadget, travel, preparing for a wedding, buying your 1st car, and/or owning a house. We need to save for our future expenses. The challenge now is that a lot of Filipinos cannot delay gratification. Instead of saving for their wants and needs, they reward themselves instantly by going into debt. Thus, a lot are struggling financially because of this spending habit. We need to remember the feeling of how good it was to save in our piggy banks when we were still young. That great feeling of excitement when our piggy banks are almost full that we now know we can buy that favorite toy gun we saved-up for.

4. Emergencies
Whether we like it or not: there will be emergencies. This is also something we need to prepare because emergencies may be unexpected, it is best to expect them. The challenge of most Filipinos, we don’t have an emergency fund instead we often resort to emergency loans. Emergency is a problem and we don’t go into another problem (loan/debt) to solve a problem. We need to save up an emergency fund.

5. Future Health Expenses
As mentioned in my previous posts, this is the most neglected savings of a lot of Filipinos. A lot depend on company healthcare and government healthcare. However, the government benefit may not suffice our health care needs during retirement years and our company no longer gives us our benefits when we retire. Some may be fortunate to receive a substantial retirement pay, but without long-term health savings, one sickness may deplete all your retirement pay. This is to remind ourselves that our retirement plan is for our retirement and not for our healthcare needs. Thus, it is a must that we should save for our health care needs.

There may be other reasons why we need to save, but with those top 5, I believe it is enough to make us realize how important it is to start saving as early as now. The best time to save was yesterday, the second best is now and the worst time is tomorrow.

This article is based on one of our advance training lectures and classes. For more inputs like this click the sign-up button and/or subscribe or follow us with our social media accounts.

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