Why Saving Is The First Step Towards Financial Independence

[moonchild]

As humans, we tend to be very impulsive when it comes to almost everything, we over indulge a lot, and the case is even worst when it comes to money because, we can use them to buy other things that we want, fighting the urge of spending money every now and then can help. us to stay disciplined through our journey to financial independence.

To be able to save reasonably, we need to learn to live within our means, this means we should only buy things that are very important to us example food, clothes, bills and rent, the remaining balance should go directly to our savings.

Savings can then be used to do other things that will bring more money without actively working, example fixed deposit or mutual funding etc.

This attitude and discipline we cultivate will help us to stay on target and repress our impulsive nature of buying things we can't even afford.

Savings should not be a gigantic amount, even the change that you come back with after shopping groceries can be saved, it's not the amount that matters it's the discipline to say No to our innate desire of spending on things that don't even matter to us.

 

[Finger Geek]

To be able to save reasonably, we need to learn to live within our means, this means we should only buy things that are very important to us example food, clothes, bills and rent, the remaining balance should go directly to our savings.

That is it. The best way to have savings is to buy only what we need not what we want. And there are also some people that will say that but I only buy what I need . Why have I not been saving well. That is because they are buying more than there pocket.

For example a person that earns $100 monthly and wants to have savings from that $100. Truly the money might be small. But savings can still be made from it. He will learn to buy what he needs that are cheap and good as it goes with his pocket. If a shirt is sold for $10 and it is of good quality, he can buy it. Instead of going for the one that cost $50. Because buying the one that cost $50 means that at the end of the month after he have also paid for some bills, he will end up not having a savings or been a debtor.

When we look at this rich people. It is not all of them that were born rich . Some start from having as low as $100 a month as there salary or monthly income and grow big into a millionaire or billionaires. That is because they managed there money well. They sacrifice not having the best quality of shirts then. But now they can buy best of the best quality shirts.

 

[moonchild]

@Finger Geek very apt submission.

We often confuse savings and we give ourselves unreasonable excuses like we don't make a lot or I'll start saving when I start earning a lot of money, which never happens.

In today's culture most people want to keep up with Joneses, what that means is, they always want to do anything that the crowd does, for example in Nigeria today, there's an iPhone craziness among the youth, where your esteem is measured based on the phone you have and if you don't have an IPhone to most people you're broke and don't worth much.

These are one of the reason most people think they need to have the latest things to accord respect forgetting that respect is earned not bought.

Anybody with this sort of mindset can hardly save, because before even the money get to them they have already budgeted how they will spend it.

What I realized is, if you want to have financial independence you have to be willing to do defy the societal norms and do what's best for you not what other people think of you because at the end you would be the one that will suffer the consequences whether good or bad.

 

[Abigael]

This is very true. Saving is really the first and most important step towards financial Independence. And it all starts with you knowing how to spend your money wisely. That way, you have enough for your expenses and for your savings.

Spending wisely requires that you have a budget that specifically states how much you need to spend. Writing a shopping list is much better than going for shopping with so much money and no plan on what you are going to buy.

When you budget, you also get to specify your needs and wants. That way, your priority will be to satisfy your immediate needs and forego the desires that just makes you loose alot of money instead of saving.

A person who budgets and saves well will become financially independent no matter the small amount they are earning. But you will find that a person who is earning so much money can become financially unstable because they don't spend the money well.

 

[Finger Geek]

We often confuse savings and we give ourselves unreasonable excuses like we don't make a lot or I'll start saving when I start earning a lot of money, which never happens.

I like this and of course you are very right. I also know many people that do make such statement. Like I do say whenever I am talking with other people that know one is born poor and no one is born rich. It is left for the person to choose what he or she wants.

Why will you say that because you earn little, that is why you don't have savings. That is very wrong. So are they now saying that because they earn little then they will never make it in life. No that should not be the thinking of some one that wants to be rich in life.

For some one that earn little. He can still have some savings even if the savings is not much. But that little can become many. We can reduce what we buy every day so that will will be able to manage our little earnings. That is the only way someone that earn little can have a savings.

 

[Kingsley]

In my own opinion financial independence is a state of been financially free to spend money on our basic needs without relaying on the help of others or a loan before we can be able to meet up with our business obligations. Financial independence has suddenly become a thing of the past or should I say financial independence or free is a mirage in this country of ours today as both the working class and business class mostly those with the frame work of the small and medium scale enterprises are all financially dependent due to the high rise of the cost of living and also the cost of all goods and services. These I wonder if people truly have what we term as savings as almost everyone depends heavily on loans to meet up their business obligations. People have been having a very hard time to take care of their basic needs which include clothing, food, and shelter. It is indeed a terrible situation. But in a normal society in is all good to save and invest on something lucrative as that it the only way to guarantee financial freedom and success. Investing on a viable business is the key after and not just saving alone.