Saving money is the greatest invention of human history. In 30th century BC, the currency named the “shekel” was made by humans from Mesopotamia. Following that, some similar systems have been used for over 5,000 years. Currencies have made a big contribution to evolve the human economy. Ancestors invented it for measuring value, exchanging value, and saving value. In these functions, saving value is the most important one. Money should be saved instead of wasted to solve emergency problems, to prepare retirement, and to invest in our future.
One reason is that saving money is the best solution for emergency situations. Normally, we can’t predict the future. Therefore, in our lifetime, we might cause some troubles. For example, disaster-caused damage to residence, car accidents, and serious illnesses. Some say, insurance can solve these problems. Unfortunately, however, to cover all of troubles by insurance is not realistic. If you face a heavy predicament which is not covered by insurance, you will have to solve it by using your savings. If you don’t have any savings, you will have to borrow money from a bank or a consumer finance. Loans without planning are dangerous for your finance because it requires to repay money with interest to them.
Second of all, after retirement, to earn income is more difficult than before for most people, and saving help this situation. According to the articles from NPO named Pension Right Center, the average pension in the U.S. is $18,000 per year. Also, in another article from The Motley Fool, an economic website, the average cost of living in the U.S. is $44,600 per one year. From this fact, residents will have to spend $26,600 per year by themselves. If you retire at 65 years old and live to 80 years of age, you will have to prepare about $400,000. This amount is not easy to earn for most elderly citizens. Saving money is the most common way for preparing retirement.
Finally, we can invest by saving instead of wasting money for the future. For example, to get $400,000 with up to 40 years after for old age expenses, preparing all of them is not necessary. If you save $500 every month with the compounded annual rate at 5%, the principal of $240,000 will amount to $400,000, which is about 1.67 times larger than the original price. Moreover, education is one of the highest investment efficiency in investment products. For example, to acquire great knowledge such as history, language, and science, is available by reading books, and most costs are reasonable about several $10. The knowledge you got will be useful in your life. Saving money expands the possibility of our future by investing.
In conclusion, saving money provides us abundant ways such as preparation for solving emergency problems, retirement, and investing for our future. Our lifetime is limited, and we should select the best way every time. To save money in an effective and efficient manner, you should begin as soon as possible. It’s my sincere hope that you will spend good life by saving money.