There are some people that have a lot of savings behind them and swear that having savings is really important, but there are also people who do not rely on it too heavily and feel that it is not worth saving money. If you are wondering whether having savings is a good idea, it is worth thinking about the pros and cons and also considering your own situation and whether they will benefit you personally.
Advantages of Having Savings
- When you have savings you will be able to know that there is some money available for when you need it. This means that if you have an emergency and suddenly find you do not have enough money for something, you will be able to use the savings to pay for it.
- You can earn some interest on savings, which means that just by having them in the bank, you will be able to have some payment for them.
- It can give you a sense of security knowing that you have the money there if you need it.
- It can be a good way to save up for something so that you can afford it, such as a holiday.
- You will be able to avoid borrowing money in some situations and therefore not pay the cost of the loan.
Disadvantages of Having Savings
- You will be putting money into the savings account when you could otherwise be spending it right now on things that you want.
- The interest you get is likely to be low and could even be lower than inflation so you could be losing out by saving rather than spending and getting the full value out of the money.
- If you need money you will have the option of borrowing so it may make no difference as to whether you have savings behind you as you will still be able to get money if you need it.
- If you use savings to pay for things, you will have to replenish them and that could be as difficult as making loan repayments.
Whether you feel that having savings will work for you will depend on what you feel is important. Consider whether you will feel better if you know that you have money behind you or whether you will be happier if you are spending money. It is worth thinking about the costs of borrowing and whether this will have a bearing on whether you feel that it will be better to save the money and have something to use if you need it or whether you are happy to use a loan with no guarantor. It is worth also thinking about the fact that you will need a good credit report to be able to borrow money in most cases and you will need to make sure that you are confident that you will be able to repay the loan. It might be hard to save money, especially if you do not have much left each month or any at all. However, if you do feel that saving up is important, then you could find ways to do it. Perhaps by cutting down on how much you are buying, trying to pay less for the items that you do buy and looking for ways to make some extra income. If you start thinking about it, it is likely that you will come up with some ideas on what you can do in order to be able to save. The more motivated you are, the easier you will find it to make the necessary changes to achieve your goal.