1. Why should I save? Developing and maintaining a good savings habit throughout your life is one of the smartest financial decisions anyone can make. Saving regularly is important in order to:
(a) Protect against financial emergencies. Everyone should save in order to have money available for unforeseen needs or events, such as unexpected medical expenses or car repairs. (b) Earn interest on money not currently needed. Savings can earn interest. (c) Purchase expensive items. When you are young you might save to pay for toys or treats. As you get older you might save money for holidays, cars or for a deposit to buy a house.
(d) Earn a credit rating for possible future borrowings. Many financial institutions will only give you a loan if you can prove you are able to save regularly and will therefore have the ability to repay the loan.
(e) Provide for your children’s education. This could include books, uniforms and college fees.
(f) Provide for your retirement. In retirement you will have a much reduced income.
Savings Needs at different stages of the Financial Life Cycle Children
Teenage and young adults
Young adults starting a career
Adults
setting up a new home
Main Reasons for saving Toys and treats
Most other needs are provided free by parents
Clothing Socialising Hobbies
Major financial purchases such as travel or buying a car
Unexpected financial emergencies Marriage
House purchase Household goods Food and clothing Utility bills Holidays
