Saving money is a good idea and is a modern self protection subject. If you aren’t saving money you should be! Money gives flexibility, peace of mind, and ability. There are three simple reasons to save money, emergencies, buying power, and wealth building.
Emergencies come all the time. The simple ones happen all the time. When the refrigerator goes out, you can just write a check to buy another one. You should always have some cash on you. If your car gets stuck in the ditch because some jerk ran you off the road while they where texting, having $20 or $40 cash you can get someone with a big truck to pull you out. Having a saving account and some cash on hand turns most emergencies into an inconvenience.
There is always some sale going or an opportunity that all you need is a little money. Not a “get rich scheme,” but a legitimate opportunity to buy something that could make you money or save you a lot of money. When the stock market fell in 2008, I would have put a bunch of money in when the market dipped below 8,000 points. Sure it went down to 6,626 in March of 2009, but it was back to over 10,000 by November of 2009. I would have made 25% on my money in 8 months. That would have been an annual return of 37.5%. How many opportunities is there to make that much money?
The last reason to save money is to build wealth. Wouldn’t it be nice if the interest on your money could make more money then you did at work? That means that at anytime you could leave and still have enough money to live a good life. It takes decades of work to build this much savings, but 10 years from now is still going to be 10 years from now whether you save money or not.