Savers can sometimes be categorized as no fun because they are always saying "no" to everything. But don't fret too much if you are a natural saver. There are many advantages to saving as much as you can early in life. Here are just some ways you benefit:
You may find you no longer need to work one day. The biggest benefit of saving early in life is that you get to choose how to spend your time sooner than everybody else. Saving and investing early compounds more dollars for a longer period of time, and that means a bigger stash. There will be cycles where it seems like you keep throwing money into money-losing assets. But by staying the course, the ebbs and flows of the market will help you reach your retirement goals because the market as a whole makes money in the long run. You could still choose to work when you have enough money to call it quits, or you might not. The freedom is entirely yours, and that's priceless.
It gives you more freedom to choose the path that best fits you. Opportunities are truly everywhere, but many people are unable to take the leap because so much of their life is riding on their current salary. When you save more early, you'll have the financial resources to make sound choices that might not pay off in the short term but will ultimately benefit you in the long run.
You can very easily increase your lifestyle at any time. Some people argue against making sacrifices to save early because you might end up saving more than you will be able to use in your lifetime. But you can just increase your standard of living whenever you want to if you have too much. The kicker is that the longer you delay gratification, the higher your lifestyle can actually be adjusted to later because of all the interest you earned on the cash you saved.
You will have less stress. Money problems are a common source of anxiety for families. When you have more in the bank, you don't have to worry as much. Losing your job might still be a cause for concern, but it won't be catastrophic if you have enough money saved. A significant emergency fund can ease a lot of anxiety because your basic monthly expenses can be taken care of while you regroup and figure out what to do next.
It gives you added confidence. Knowing you were able to amass a fortune by hard work is incredibly satisfying, and can give you a huge confidence boost. If anything, the confidence will help you perform better at work, because you aren't as scared about losing your job due to any missed paycheck turning your life upside down.
Saving early in your career could allow you to retire early, sleep better at night and even boost your self-confidence. Why would you ever choose to buy more stuff you won't even remember in place of that?
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- Personal Budgeting