Most of us know that we need to save money.
But … why?
Over on Quora, a 21-year-old earning an “average salary” explained that he’s spending every cent on buying himself a nice life, and asked the community if he should be saving as well. The overwhelming response was yes, he absolutely should.
If you don’t save in your 20s, users explained, you could be sabotaging yourself in the following ways:
1. You’re giving up the interest you would earn.
“When it comes to saving for the future or for retirement, all of the money you earn in interest is made in the early years of your life, not the final ones, and you can never make up for that later. … Every single thing you do today is preparing you for the life you will live tomorrow.” — Jay Bazzinotti
2. You’ll be unable to cope should you lose your job.
“… My employer laid off half the staff in my division. I was young, fresh out of school and my work experience was limited. I had very little saved. Over the course of the next year, I struggled to find steady work … The bills piled up, many went to collections. I started getting phone calls from debt collectors. My life became very stressful.” — Jason Ewing
3. You’ll take the risk of going backwards in life.
“I am going to give you one simple rule that my mum gave to me and it has made all the difference in the world to me: ‘Don’t ever go backwards in life.’ … I used to spend a lot more money when I was younger and on foolish things, but as I have grown older, I realise my mum was right. Focus on keeping the money you earn and keep your expenses at a level where you will not have to move to a crappier home or beat up jalopy when you are middle aged.” — Sanjay Sabnani
4. You’ll be putting unwarranted faith in your future earning power.
“Forty years from now you might still have food on your table, a shirt on your back, a roof over your head, plus much more. But your body and strength will no longer be as good as it is now. The same goes to your ability to ‘earn an average salary.’ You’ll probably fall to a serious illness, for which you’ll spend what little you have saved. Then you’ll live for 40 more years. In poverty.” — Kit Monisit
5. You won’t be investing in yourself.
“What I wish that I had done more of when I was 21 was invest in myself. Rather than blowing money on eating every meal out, I should have put it into buying a condo. I wish that I had put more money into savings for rainy days. I wish that I had taken more courses just because they interested me and that I could afford them.” — Mark Milotay
6. You could get stuck in a job you hate.
“You should think about what you can do if you start hating your job. If you are spending every cent you are making, and the boss pulls out whips and chains, then you are going to have to keep with the beatings. If you have a cash reserve at home, then you are in a better position to tell your boss to shove it.” — Joseph Wang
7. You won’t be able to afford your future goals.
“Is it possible that one day you might want to buy a house? Get married? Have children? Buy a nice car? Take an extended family vacation? Send your kids off to college? At your age, some of these things may not be on your mind right now, but very likely, they will be someday. You’ll need money to pay for these things — lots of it.” — Garrick Saito
8. You’ll regret it later.
“I don’t think you’ll find a single person who looks back on their life and says ‘I wish I’d spent more money on frivolous things.'” — Shelby Buttimer
9. You’ll be accelerating your consumption curve.
“Obviously, as you make more money over time, there will be more things you can afford, and trust me that once you have them — even though some of them don’t remotely seem like ‘needs’ now — you will begin to think you can’t live without those things as well. So, my advice is to slow that curve as much as you can. If you can cut back now and really decide what is actually a need versus what is just a ‘want,’ and get in the habit of that, you will a) save money, and b) be happier over the long haul.” — Brad Newberg
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