Reasons to save money

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Reasons to save money by Mind Map: Reasons to save money

1. Definition of what is saving money

1.1. Saving money is the percentage of income that the person does not spend or invest. Thus, seeking to have a fund for a disbursement that must be made later, for example. Saving is a very important element of a family, but it is only achieved through good estate planning. In many cases it is necessary to go to a financial advisor.

2. Why is good to save money?

2.1. Allows you to achieve goals Saving and investing are financial tools to achieve short, medium and long term goals such as taking a trip, buying work equipment or paying the premium for a house. It is essential to establish savings objectives and the deadlines to achieve them.

2.2. Reduce debt With a defined savings goal, you usually avoid accumulating debt. Also, with the monitoring of expenses, the payment of outstanding debts can be projected in the short or medium term.

2.3. Set a good example for future generations Teaching children to save and manage their own money is as important as developing hygiene, coexistence, and eating habits; in this way, in the future they will be able to have healthy finances.

3. Importance of saving

3.1. Family members: allows you to face unforeseen situations with a greater perspective It allows you to take advantage of opportunities for a future as a family.

3.2. For companies: allows the production of new good investments It allows to have the ability to expand the company or business.

4. Clasification

4.1. Public savings: It is that saving that comes from the structures of the State. Its purpose to cover future provisions against possible unexpected situations that have to lead to significant public spending. For example, the burning of a forest, the breaking of a dam, very heavy rains that destroy a town, etc. In addition, public saving is very important for the social welfare state. We refer, for example, to retiree pensions.

4.2. Private savings: It is the savings of families. This can become null due to structural problems such as unemployment, deflation (reduction) in wages or the rise in prices of basic goods.

5. Conclusion

5.1. We can say that saving is very important. Thus, for it to be possible, economic planning is necessary based on the possibilities of each person. Similarly, it is important to mention that excessive use of credit or excessive indebtedness is not good.