Since change, whether it’s good or bad, is a constant thing in our life, then it goes without saying that saving money is one of the defense mechanisms that you need to think of adding to your armory
Today we’re going to answer the question of “ Is saving money good or bad?”, and we’ll do it by focusing on your 6 main wellbeing dimensions
There are 8 unique advantages of saving money that affect your overall wellbeing dimensions positively, and only 1 disadvantage that you can overcome using 1 of 2 options.
Content Covered Today:
Advantages of saving money on your wellbeing
Since we’re talking about money then it’s obvious to start with the financial wellbeing dimension that is directly affected.
1- Financial freedom
Although making money is your first weapon in achieving financial independence and freedom, yet saving money improves your chances of reaching your financial freedom and being financially secured.
2- Financial crises immunity
Saving money is good when you want to be immune against possible financial crises that can hit you, like a job loss or an economic crisis in your country.
One way to become immune to that is to save a full emergency fund that is equal to around 8 months of your monthly salary.
3- Financial independence
Saving money helps you build the foundation of your independent business or side income streams.
You can do that by saving money from your full-time job for example and start investing it into your side income from blogging or Youtube.
As we mentioned before, all wellbeing dimensions are tangled with each other and there for a change in one impacts the rest as well.
That’s why saving money can also affect your mental wellbeing as follows:
1- Low Stress
Saving money and being prepared for life emergencies significantly decreases your stress levels and this is where you want to be.
I know that stressors are more than just losing a job or having a setback in the economy but they’re the leading causes of stress, so you better aim for eliminating that.
Saving money also reduces your stress levels when you pay off your debts one in a time if you’re following Dave Ramsey’s baby steps to reach financial freedom.
2- More tools access
When you save money, you can buy that tool you wanted to add to your productivity system, or you can buy that book that you wanted to read, or you can buy for a paid course.
3- More learning available
Not all learning is free and sometimes what you’re looking for is a paid course or training to get certified at.
For mental wellbeing it could be a productivity course or coaching that you’re looking for and you can have it once you save for it.
1- More tools access
It goes without saying that most of the healthier choices included in the physical wellbeing dimension, are more expensive than unhealthy options:
- Having a fresh juice costs more than a can of soda.
- Cooking a meal can be more expensive than buying a fast food.
- Buying gym membership or tools can cost more than buying a game or buying TV network subscription.
- Buying an ergonomic chair is more expensive than sitting on your sofa or regular chair to work
That’s why, saving money is a good strategy if you’re goal is to improve your physical wellbeing, since you’ll be able to access most of its needed tools like:
Healthier food, exercise tools, ergonomic accessories, sleeping tools, and relaxing tools needed like a guitar if you’re intending to play music, or drawing kit, or going to the movies
2- More learning available
Same with mental wellbeing, but here you can access physical wellbeing related learning or courses.
1- Improve communication
Since social wellbeing is about human interaction, either in the day-to-day activities with other grownups, then saving money has little direct effect on social wellbeing
It can have an indirect effect by improving mental wellbeing and decreasing stress levels that add more confidence to the communication equation with others.
2- Improve parenting
It can be that you’re saving money to do activities for your children or travel with them. This fosters the bond between you and your children.
Note: having money isn’t the only option to strengthen your bond with your kids, it’s just one of the ways, so not having it isn’t a showstopper AT ALL.
You can be saving money for your children’s future or college, which supports them later on mentally and emotionally.
3- More learning available
Same with mental wellbeing, but here you can access social wellbeing related learning or courses.
1- More Happiness
It’s true that money can’t buy happiness, but it can buy the things that can make us happy.
You can’t buy happiness but saving money can let you work less hours, so you have more hours now to enjoy or travel.
Saving money can let you buy the guitar you’ve been dreaming of, and now you have it and can play with it all day long
2- More learning available
Same with mental wellbeing, but here you can access emotional wellbeing related learning or courses.
1- Donation activities
Spiritual wellbeing is all about being connected with your higher purpose in this life, and donating money to support your beloved ones, community, or the rest of the world is no exception to that.
With saving money, now you’re able to provide financial support and serve your purpose.
Note: Donating money isn’t the only option you have to support others, you can donate your time, energy, efforts, and experience too, and we’ll cover that in the spiritual wellbeing topics.
2- More learning available
Same with mental wellbeing, but here you can access spiritual wellbeing related learning or courses.
Disadvantages of saving money on your wellbeing
Comprising life quality
The only valid disadvantage of saving money that I could think of and found in my research, is that saving money can contribute to comprising the quality of the life you’re living.
Since saving is about deducting from your income, then it means less spending overall, and sometimes it means less spending on needed stuff.
Like I said, it varies from one person to another depending on the income, lifestyle, and saving %.
The rule of the thumb is to save around 10% of your income as a minimum and you can increase to 20% if you can.
Now what happens if you’re income is exactly matching your expenses?
This means that the 10% you’ll save is 10% of your needs being compromised and this can have a negative impact on your emotional wellbeing.
That’s why some don’t believe in saving money and enjoy the money as they move along hoping that it gets better the next day and sometimes it does, and this makes them keep going.
To overcome this disadvantage, I recommend the following options for you to choose from:
1- Decrease the amount saved from your income:
I know that 10% is the common minimum limit shared by experts but if it’s going to affect your quality of life and therefore abandoning saving at all, then decreasing it by couple digits or even half is better than nothing if it’s going to help you save anything.
2- Zoom in on your expenses:
Sometimes things may not look as bad as it looked like at first. You may discover that what you need to cut isn’t important as you thought.
Or you can find out that you can switch to another cheaper alternative and still feel good
That’s why, tracking your expenses is an important step in better understanding your spending behavior and the items you spend money on.
Is saving money good or bad?
Knowing the above poses important questions here:
Does saving money worth it?
Should you be saving money knowing that you may cut some items, needed or luxurious, from your month?
There’s no right or wrong answer to this question in my opinion. I mean, it’s your life and you know better than anyone one how to handle it.You have the facts at hand to use. There are 8 unique advantages to saving money (the learning benefit only counted once) covering all your wellbeing dimensions, and only 1 disadvantage.
Also, you can overcome the disadvantage using the options mentioned above
From my humble perspective, saving money is your first defense mechanism against all life instability, crises, and challenges, and the possibility of missing out on couple of things is a small price that I can pay for that.
Now you decide if you want to start or continue saving money or not.
Exercise: Decide if saving money is worth it for you or not
Let’s put what we discussed above into practice so that you can start implementing today.
What is the activity
This is an activity for you to evaluate how saving money can affect your own life objectively without anyone interfering.
Benefits of this activity:
1- Increase the importance of the saving money habit, now that you know what you’re going to have out of it
2- Increase your motivation to keep going if you stumbled along the way, and you will trust me, and this list will keep you going once you check it again
Instructions of this activity:
Below is a free sheet that you can use to identify the benefits you’ll gain from saving money. Those are the things you can have or buy.
Also, you’ll identify the cons if any, this means the things you’ll miss out when you save as we discussed earlier, and evaluate its importance and whether it’s okay to miss out on them.
Now you have the full picture, and you can make a better objective decision