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Saving money is one of the key rules of building a solid financial foundation. In fact, it’s your starting point. Long before you start putting your money into investments or paying off all the debt, your funds should be going into savings accounts. 

 

The question is, why are you saving that money? 

 

There are numerous reasons to set funds aside. But I believe there is a golden reason that can help you build stronger financial habits. 

 

And that’s saving money for no reason whatsoever! Just hear me out. 

 

The Number 1 Reason for Saving Money

The number 1 reason for saving money is stashing your money for no reason at all

 

 

There are many reasons to save money. Right now, if you take a piece of paper and start writing down everything you want, you will have a long list of items. But the likelihood is that you don’t have money lying around to meet all those needs. So, the next course of action is to save money for each item. Right? 

 

Here’s a question: without that list, would you be compelled to put money aside? Probably not. 

 

And for many of us, we rarely put money aside unless there is a particular reason.   

 

Yes, it’s important to have a reason for saving money. These reasons give you an idea of how much you need to save and the timeline. And when the time comes for that purpose, you are set. 

 

But, when you have money and no reason to save it, the best thing to do is put your money in a savings account. 

 

Here’s why:

 

It Helps You Build a Saving Culture 

Once you start saving money without any reason, it becomes a habit. And a good one at that. Any time you come upon a windfall or have extra cash at the end of the month, your first instinct will be to save the money instead of spending it. 

 

Once you have built this habit, managing your money and working toward financial freedom becomes easier. 

 

It Gives You Freedom

In my 20s, I started saving money in my Sacco account for no reason. I had no financial goals whatsoever. I just knew I needed to save money. While I made many money mistakes back then, and believe me, I made some pretty dumb money mistakes; this strategy was not one of them. 

 

Setting money aside for no reason gives you the freedom to spend it however you want when the time comes. Think of it as delayed gratification. 

 

It is a much better strategy than spending on unplanned expenses. And when you have something you really need to spend on, you might not have to get into debt. Or wait for an extended period as you accumulate funds. Your stash of savings will be there for you. 

 

Related read: 5 Money Lessons I Learned in My 20’s

 

Other Reasons For Saving Money

Now that you know you don’t need any reason to set money aside, let’s talk more about the common reasons for saving money. 

 

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For Specific Financial Goals

Remember that list you made a few minutes ago at the beginning of our article? Yeah, that list. What’s in it? 

 

Do you want to take a vacation? Maybe upgrade a household item? Go back to school? Get out of debt? Or start a business? Whatever is on your list either falls in the short, medium or long-term goals column. 

 

That’s where savings accounts come in handy. If you have specific goals you are working toward, you can start putting that money aside in advance. 

 

For example, one of the most essential savings accounts to have is an emergency fund. At the risk of sounding like a broken record—because I never miss the chance to talk about building and rebuilding an emergency fund—an emergency fund is vital in building your financial foundation. It’s the kitty you run to if unplanned life events come knocking at your door. 

 

And Taking Risks

If money wasn’t an issue, what would you do right now? Quit your stressful job and relax as you search for greener pastures? Start a side hustle or business? Relocate to a new city or country to start over? 

 

With savings, you can take these risks without worrying about money. For instance, if you want to start a business, you need capital to get things running. A savings fund you’ve been building over time allows you to take this calculated risk without worrying. 

 

In Conclusion

As much as we write down our financial goals and have a reason to save money, I’d like to challenge you. Start putting money aside even when you have no reason to. When you come upon a windfall, e.g., a bonus at work, try saving a significant portion of the money rather than spending it all. It will give you the freedom to choose when and how to spend your money. You will also start to develop better money management habits. 

 

FAQ

Where Can I Save My Money

There are many places to stash away your funds. However, I’d recommend you first consider your goal for saving money, including the time horizon. Some channels are less liquid than others, meaning you cannot withdraw from your account immediately. Or withdrawing before the set date can attract a penalty.

 

That said, the top places to save your money include;

 

 

Can I Have Multiple Savings Accounts

Absolutely! You can have as many savings accounts as you want. We call them sinking funds. While you can have a single savings account for all your financial goals, sinking funds help you stay accountable to each savings financial goal.   

 

How Much Money Should I Have in Savings

There is no limit to how much you can have in your savings account, especially if you have yet to set a goal for the funds. If you are working toward a particular financial goal, your target amount is your limit. 

 

Having said that, be careful of putting all your funds in a savings account instead of investing. At one point in your financial journey, you have to put funds in investment assets for better returns and wealth creation. This could be in shares, bonds, or real assets. 

DISCLOSURE: THE INFORMATION PROVIDED TO MY READERS IS GENUINE AND PRECISE TO THE BEST OF MY KNOWLEDGE. THE LINKS PROVIDED IN THIS ARTICLE DO NOT BELONG TO ANY AFFILIATE PARTNERS AND I AM NOT PAID FOR THEM. THE ARTICLE OFFERS GENERAL INFORMATION AND SHOULD NOT BE USED AS A SUBSTITUTE FOR PROFESSIONAL ADVICE OR HELP THAT CATERS TO YOUR INDIVIDUAL FINANCIAL GOALS. KINDLY SEEK HELP AND ADVICE FROM YOUR FINANCIAL ADVISOR FOR PERSONALISED ADVICE AND HELP. ANY ACTION TAKEN BASED ON THIS INFORMATION IS AT YOUR OWN RESPONSIBILITY AND RISK. 

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