Today, i am going to talk about the importance of saving. For some people, the concept of saving is not too new, for others, it can be something entirely alien to you, just like how i was before i really understand what was saving at my current age of 22. Some would say i am a little late, but i am glad now that i have started saving and stop spending.
Before i got into the notion of savings, i was spending like crazy. All my savings over the years turned into naught. I used to think i was trading meaningful and deep life experiences for money, but i could not be more wrong. Many times, i simply splurge because i felt like it. All my expenses combined accounted for loss of $30,000 – $40,000 worth of good savings. This amount includes anything that is not a necessary expense like transportation, food, water and air.
However, my circumstances have changed. I was forced to grow up faster than anyone in the shortest possible time of a few months. My priorities shifted, my reality struck me, my finances were in a mess and my life was in a mess. I went through my spendings, and took on several healthy habits that i would advise anyone to adhere by:
- I am now saving 50% of all my income, regardless of where they come from (i have big plans for these savings when i graduate)
- Making good progress on eliminating TAXIS as a transport option (taxis, for a period cost me hundreds per month, the stupidity of youth)
- Saving heavily on transportation costs
- Food expenses are also reduced after discovering that cooking might not be the cheapest form of spending on food
- Entertainment expenses are significantly reduced, heck i haven’t drank a beer in 2 to 3 months
- Book costs are reduced from making an extra trip down to the library
- Using credit in a controlled and sensible manner
Some of my habits are pretty crazy. I doubt anyone with strong commitments would be able to save 50% of their income and i might reduce that amount as time goes by but for now, it is sticking. Also, i would recommend anyone who is financially sensible to get insurance. As i begin to get older, i start to believe in insurance more and more, and i believe anyone sensible enough should feel the same as me. What about you? Have you realized the importance of saving?
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