10 Reasons Why Saving Money Is Important Post-COVID
The pandemic has shown us all that life can change in the blink of an eye. One day you can be employed, and the next you can lose your job through no fault of your own. This crisis is a salient reminder of why saving money is important. If you have a financial cushion, you’ll be able to weather challenges better.
Even after the coronavirus passes, you should still keep topping up your savings account to cover unexpected expenses like car repairs and medical bills. Saving up will also enable you to splurge on vacations and other wants without going into debt.
Here are the top ten reasons why saving money is important in a post-COVID world.
Top 10 Reasons Why Saving Money Is Important
1. Career Changes
Studies have shown that four in ten jobs that went away during the pandemic may never come back. The industries that have been affected most are retail, restaurants, transportation, and warehousing.
If you’re in one of these fields, it may become increasingly difficult to find work as the number of available jobs shrinks. Saving extra money now can give you the cushion you need to retrain for a new career.
The pandemic has reminded us all that emergencies can happen at any time for reasons that are out of our control. Saving and building an emergency fund is important if you want to be financially prepared for unexpected events like health problems and unemployment.
If a recession occurs toward the end of your working years, you may be forced to retire early.
Many workers in their fifties and sixties struggled to find new jobs after getting laid off during the pandemic. To provide for their families, some seniors took Social Security early, causing them to lose hundreds of dollars per month in retirement income.
To prevent this from happening to you, it’s important to have a robust emergency fund that can carry you through extended job loss.
It’s also a good idea to save a little extra money for retirement. That way if you are forced out of the workplace due to a recession or age discrimination, you’ll still have a big enough nest egg to live comfortably during your golden years.
4. College Funds For Your Kids
Many of the jobs that aren’t coming back after the pandemic are ones that only required a high school education. In the future as automation increases, it may be even more important to have a college education to stay competitive in the job market.
Setting your kids up with a college fund can give them the leg up in life they need and help them cover rising college costs without taking on lots of debt.
5. Buying a Home
Surprisingly, there was a big housing boom during the pandemic that caused home prices to rise substantially. If you want to be able to afford a home or investment property in this hot real estate market, you’ll need to start socking away some cash for a down payment.
6. Transportation Costs
If you’ve been telecommuting during the pandemic, you’ve probably saved a lot of money on gas and car insurance because you’re not driving to work. To prepare for increased transportation costs when you go back to the office, it’s a good idea to put the cash you’re saving now into a sinking fund.
If you have a fund set aside for car maintenance, you won’t need to worry or go into debt every time your car needs repairs.
7. Pay Off Debt
Tightening up your budget can help you put more money toward your debt and get it off your plate sooner.
Once you finally pay off your student loans or credit cards, you’ll feel a huge sense of relief. You’ll also be able to allocate more money toward savings and investments once your debt is gone, which will help you achieve your financial goals sooner.
After being cooped up at home for months, you’re probably itching to take a vacation! Creating a vacation fund will enable you to take a nice trip once the pandemic ends without racking up credit card debt.
9. Medical Expenses
The coronavirus is an important reminder that even young, fit people can have a health emergency. Putting extra money in your HSA will help ensure that you can afford to see the doctor the next time you’re feeling unwell.
10. Peace of Mind
One of the biggest reasons why saving money is important is peace of mind. Having a financial cushion is incredibly reassuring because you know you can weather whatever challenges come your way.
Although it’s difficult to live below your means and delay gratification so you can save money, it’s definitely worth it to have a comfortable, financially secure life.