LIFE HACKS

Friday, October 15

4 benefits of a good savings plan

Having a life savings plan will prepare you financially for a long and happy life. It doesn’t mean you have to give up on enjoying life, it just means you spend wisely to save for your future. Nobody is promised tomorrow, and no one wants to live out their retirement years with limited choices or none.

We spend all our time providing for our families. Nobody wants to leave their family in difficult financial circumstances in the case of death or serious injury. Having a plan can help you protect your family members financially in case of death. 

Below are some of the benefits of having a good savings plan.

  1. Understand your cash flow - Nothing will affect your financial future more than your ability to understand your household’s cash flow. If you want more money to save for the future or to spend now, you must understand your current spending patterns and habits.
  2. Helps you make the important decisions - The clearer you are about what you want to do in the short and long term, the easier it is to make spending choices that you'll be happy with when you look back at them.
  3. You can automate your savings – Setting up an automated savings debit allows you to save towards specific targets like buying a car or renting a bigger apartment. If you can save that money automatically, you're far more likely to continue saving those funds in the future and even to increase your contributions over time.
  4. Plan for spontaneity - This may sound contradictory, but it's essential. Many people have resorted to resist tracking their spending because they seem constrained. A good solution to this is to save money that is purely for spontaneous spending. Creating a spontaneous spending account protects your major savings account from being touched until you achieve your financial goal.

Essentially, start a savings plan gives you the opportunity to enjoy yourself in the future whilst denying yourself today. A life savings plan, while unlike your normal savings plan, should be strongly considered to save towards a financial goal, and protect your family from financial disaster in case of death.