Advantages of Saving Money
Saving is what remains after spending out of one’s income. This money may accumulate over a period of time with successive remainder being kept in form of savings in a separate account for a corporate institution or individuals within the society. In many circumstances, money is used for various purposes that include offsetting debts, attending to emergency situations, personal or corporate development, or investment initiatives. Saving money is one of the acts that lead to wealth creation. This act helps in accumulating wealth for an individual. There are many advantages of engaging in a saving ordeal. This essay deals with the advantages of saving money, which are budgeting, keeping expenses record, and controlling expenditure.
One of the advantages is that a person is in a position to make budgets for his money. A budget is a set of activities accompanied by associated money allocation for a given period of time. An individual may have several budgets such as expenses and development budgets that will be used in spending money. It ensures that money is used effectively for the intended purposes. In addition, a budget is a controlling tool used by companies or individual in planning for the money and its usage in a day-to-day activity.
The second advantage is eliminating personal debts. In a situation where a person keeps some money aside, he or she will be in a position to make plans for spending and borrowing. This process is very crucial in eliminating debts while making personal development. Moreover, people use their savings to cater for the daily expenses and attend to emergency activities that may arise. It creates a situation where a person has fewer debts in the event he uses his own savings to cater for the daily needs.
The third advantage is that it enables recording of expenses. Recording is the first step when it comes to the spending ordeal for money. This is where expenses and incomes are recorded when creating a budget (Loos and Loos 22). Efficient and effective saving activities for an entity are characterized by the efficiency of the recording process. Recording is the backbone of a successful saving initiative while keeping the expenses within a controllable level. Therefore, savings have a lot of advantages to the affected parties. Furthermore, it creates an environment for growth for individual or corporate wealth, which increases its value. In case of borrowing from a financial institution, a corporate or individual savings is very crucial and determines the amount to be rendered. The more the saving an individual has the higher the amount given.
In conclusion, saving money incorporates the three advantages outlined above among many other advantages. In addition to improving personal value and wealth, savings allows an individual make adjustment in form of budget allocation and controlling spending. In instances where spending overrides an individual income, one is forced to borrow so as to meet his budgeted expenses. This will leave a person indebted into debts an action that results to little saving. At the end, an entity will be incapable of dealing with an emergency situation in the best way possible. Lastly, controlling expenses is one of the comparative advantages that corporate business enterprises use to counter attack competition in the market. Low operating institution makes big strides towards development and growth due to their increased savings.
Loos, Barbara, and Barbara Loos. Saving Money. New York: Silver Lining Books, 2010. Print.