Arguably, the best trait that any person must possess in order to be successful ﬁnancially is the willingness to save money.
Though the idea of setting perfectly good spending money aside may seem rather unsavory at ﬁrst glance, it is the basis for a much broader world of opportunities. The process of saving not only brings fruitful results, but for many it can also be a much-needed asset at an unexpected time in someone’s life.
There is no limit on how early someone can begin saving money. The earlier someone starts, the better, because generally the longer someone saves, the more compound interest they earn. Compound interest is created when a bank adds interest to someone’s account at a consistent rate. To add to the effect, the interest rate applies to both the principal investment and to the interest added over time. Moreover, an experienced saver would have the knowledge of how to manage their funds more practically and effectively.
One of the most effective ways to save is taking money directly from the source of income and depositing it into a savings account at SLFCU. Ideally, savings are not solely a compilation of dollars here and there that aren’t spent. A savings account must continually be added to in consistent amounts in order for it to be most effective. If a person deposits directly from a paycheck and adds it to their savings, that person will be forced to make their remaining money stretch, which prevents unnecessary spending and builds the savings.
A savings account is a great resource for teenagers acquiring summer earnings because the more money in the account, the more interest it earns, which in turn motivates them to continue building the savings account.
Probably the most popular beneﬁt from saving is the ability it gives a person to purchase something that they need or want, which prior to saving, the person did not have the ﬁnancial means to obtain. This beneﬁt appeals to most people, but especially young people.
Opportunities lead to more opportunities. If a young person saves enough money to buy a car, for example, this can enable them to acquire better, more high-paying jobs that are farther away, which were previously impractical because of the caveat traveling imposed. Another example could be a young person’s ability to pay for a college education with saved money, which in turn offers innumerable beneﬁts in the workforce and can substantially inﬂuence an employer when reviewing applicants’ résumés.
Along with its obvious work and spending beneﬁts, a savings account can also be vital relief in an unexpected situation. Life surprise attacks everybody at one point or another, and a savings fund may be one of the best ways to prepare for it when it does.
In short, the rich beneﬁts one may reap from saving money are compelling reasons to begin saving. People who save money will have more when they need it, but also for those times when they want it. The surplus monetary asset that saving produces offers individuals previously unavailable opportunities and also helps people prepare for the unexpected. Saving is a highly beneﬁcial and almost-necessary practice to be successful in the vast ﬁnancial world.
By Roman Martinez, SLFCU Teen Member
Teens Can Get $100
SLFCU members age 13-17 are invited to submit an article on a ﬁnancial topic to be considered for publication in our Dollars & Sense newsletter and on our website. SLFCU will award teens $100 for published articles. Click here for details and to submit an article. SLFCU will review all submissions and respond within 30 days.
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