Why is Saving Money a Key Step in Making Future Plans

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Why is saving money a key step in making future plans? Chances are you have an idea of what you want your future to look like. There are things you’d like to do, places you’d like to visit, and things you’d like to own. If you don’t start saving money now, it is unlikely you’ll be able to do any of them.

Why is Saving Money a Key Step in Making Future Plans

Most of the big things you want in your life cost a lot of money, more money than you can charge on a credit card, or save for in a few months. 

Here are some of the top things you won’t be able to do or have if you don’t save money or have any savings goals.

1. Buy a House

Most people want to buy a house at some point in their adult life. It is kind of the American dream. 

Even so, it’s not always easy to do so. House prices are on the rise, and they aren’t getting cheaper anytime soon.

When you talk to a lender, they will want to check your credit score, look at your bank statements, make sure you have a stable job, and that you don’t have too much debt.

Let’s say everything checks out for you in all those areas.

Great, you can buy a house!

Wait a minute. Not so fast.

You’ll need a down payment.

Most lenders will want you to have a 20 percent down payment available.

That means if you want to buy a $200,000 dollar home, you will need to have $40,000 dollars for a down payment.

That’s not the kind of money you can save in a few months or even a couple of years.

You will also need money to pay for closing costs.

Closing costs tend to range between 2 and 5 percent of the purchase price of the house.

That means you’ll need an additional $4,000 to $10,000 at closing.

So, you are looking at $50,000 dollars in cash.

If you haven’t been saving money, there is no way you will be able to come up with this kind of money.

That means you won’t be able to buy your dream home…ever.

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2. But Your Kids Through College

Most parents want to be able to pay for their kid’s college.

If you haven’t been saving money for this purpose since your kids were born, chances are you won’t be able to afford to pay for their schooling.

Currently, state tuition is running at an average of $10,500 dollars per year. Then you will need to add an additional $11,500 dollars per year for room and board.

That’s a total of $22,000 per year, so $88,000 dollars for 4 years of college at a state school.

Hopefully, your kids will be able to get some financial assistance and scholarships, but if you haven’t been saving money for their education, they will have no other choice than to get student loans. 

They will end up having to start their adult life deeply in debt.

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3. Retire

At some point, you will want to retire. 

If you have medical issues, you might not have a choice.

Without retirement savings, you will have to do your best to live on social security alone.

This can be quite difficult if not impossible.

You’ll have to downsize how you live.

You won’t actually be able to enjoy your retirement because you won’t have the extra money to do anything.

You may have to continue working in a full-time or part-time job if your health allows.

They certainly won’t be the golden years you had hoped for.

Having a retirement savings plan and retirement accounts now will make all the difference for when you are ready to retire.

4. Quit Your Job

Unfortunately, many people hate their jobs.

I know I always did when I worked for someone else.

However, if you don’t have any savings you won’t be able to quit and find a job you truly enjoy.

You won’t have the money to go back to school to learn a trade or get a degree in something that might bring you joy.

You will be stuck and miserable, and that’s a terrible way to live.

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5. Travel

Maybe you have pictured yourself traveling the world, or RVing across the country, or just taking a really nice vacation now and then.

Travel is expensive and prices are only going up.

Without having money goals and the extra cash to travel, you can plan on sitting at home while you watch your friends and family live the life you had hoped for.

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6. Have a Big Wedding

Whether it is you getting married or your child, you can forget paying for a big, fancy wedding.

Sure, a small wedding is nice, but even small ones are expensive. 

The average cost of a wedding currently is $20,000 dollars.

Sure you can go to the justice of the peace and save yourself a lot of money, but that might not be what you or your child dreamed of. 

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7. Debt 

If you haven’t been saving money, then there is a good chance that you have lots of credit card debt.

It stands to reason that you have had to use credit cards and personal loans to pay for what you want or need.

Without an emergency fund, you would have had to charge any unexpected expenses.

Over time, it will get more difficult to make your monthly payments.

Not to mention, the more debt you have the less likely you will be able to get more credit even if you do make all of your payments on time.

At some point, a situation will arise that will put you in jeopardy of bankruptcy and possibly finding yourself out on the street.

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8. Death

No one likes to think about dying, but we all do it at some point.

It’s true you won’t be around for it once you have passed, but your family will be.

The average funeral costs $10,000.

If you haven’t been saving money or pre-paid for funeral expenses, your loved ones might be on the hook for all of that money.

And money is the last thing they should have to worry about when they are grieving.

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To Sum it All Up:

Not saving money will mean you will live a very different life than the one you imagine. You can forget owning a nice home, paying for your kid’s college, and enjoying your retirement.

The good news is that it isn’t too late to come up with some short-term goals and some long-term goals.

Create a monthly budget or talk to a financial planner for help. Once you determine your financial goal and savings plan, stick to it. 

You will enjoy newfound financial security and the future you always dreamed of.

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