Finances, slavery or liberty? Many people believe that saving money is the way to achieve finance independence while others consider the dependency of great amounts saved is a waste of resources and is better to live the moment spending all money at once time. In my belief, it is true there are some disadvantages when we only save money, but it is confirmed too, that the advantages overcome the cons if the money is saved and invested.
Saved money does not yield equal through the time and that could be provoked by several reasons. One, is the temptation to use the money collected in a debit account which reduce frequently the total amount stored. Many people become very cautious, they think that saving too much money is a reason why they are avoiding experiences which they deserve, or they are not getting enough income to cover expenses, then they start withdrawing money from the debit account. Another drawback is the inflation associated to the economy of each country that provoke loss of purchase power. It is natural that the price of the products increases constantly, and that effect is better known as inflation. In consequence, people are not able to buy the same things with the same money in this moment than in the future, even if we compare the value of the money between nowadays and the past, we will discover that it is totally different. On the other hand, lack of financial education can provoke bad decisions where the money could disappear or reduce its amount. Even nowadays there are people who used to saving money in piggy banks, under the mattress or have the cash at home. When the instrument to save money is not proper to save it, there are incidents, accidents, robberies, breaks and so on. Knowledge is indispensable to take wisdom decisions about the place where is better to save the money and keep it secure. For instance, in Mexico is well known that people in rural areas manage cash for most transactions. In those places and even in the city there are cases where people loss money because they save it inside the mattress and later one relative change it for a new one, with the savings inside. Nowadays, most Mexicans have a debit account, however they prefer to withdraw all the money to have it in cash and avoid the frequent visit to the cash machine. Among Mexicans only 3% of the people invest in long term, the rest keep the money without investment or with low risk invest. Finally, most Mexicans are not able to face the inflation rates year by year because these actions are affecting the value of the savings among the Mexico’s town.
Savings and investments help people with support and aim achievements, moreover, create environments where the finances are flexible and stable. Having savings gives people a safety net for emergencies. Unforeseen events occur everyday, in some cases those are so complicated but savings support and help to solve the expenses without loans or debts. Peace of mind status is developed when people know they have money for unexpected expenses. Stress and anxiety are very dangerous for human health, nevertheless, people who have money to face these types of events put aside bad feelings and pay attention to the important in the situation. The problem solution without additional problems always it is synonymous of peace of mind. Money is not the happiness but help a lot to achieve it. Whether it is buying a house, starting a business, or going on vacation, savings make big goals possible without going into debt. Other important aspects of saving money and investing are freedom and flexibility. Money in the bank gives people options. People can switch jobs, relocate, or make life changes without feeling stuck. Additionally, they can invest in different horizons growing their money. Even they have the backup for leading to passive income through interest or returns. For example, my own story is a perfect example of. I used to live at limit spending the same amount I received. Later I learnt how to save money. Savings supported me with projects such as in vitro practices, or my parents’ pensions. Nowadays, I am perfect able to face my own compromises and even I started investing in stock market. In addition, I am investing in other projects without worrying about the economic support, that does not mean I am not caring for my savings. More well I am taking decisions with more confidence because of them.
To conclude, it is a fact that savings by themselves are not enough to keep money out of the drawbacks the time can provoke. However, it is indisputable that saving well accompanied by investment and strategy could result in benefits for all people. Therefore, people should understand how savings work and what are the benefits in the long term to be more piece of mind in our lives. In case of continuing with the same ideas nothing will change about the economic conditions and typical financial problems that provoke more drawbacks than advantages that is equivalent to more stress and unhealthy life.
