Top Benefits of Saving Money at Young Age

In one way or another, most of us have been told by our parents or any adult family members to start saving money while we're still young. It is then followed by the financial advice of refraining from spending too much money on material, non-essential things.

If you're adulting now and haven't really given much thought to what you have been told as a young kid, you may be overcome with regret at the moment, especially if you have financially struggled through the years as a result of failing to allocate money for savings.

But it's never too late, neither for you as an adult nor for your children if you have kids now. In this article, Lumina Homes aims to discuss in relative length the benefits of saving money for your children and even for you as an adult.

But what exactly are savings?

Savings are the amount of money you store and save in a secure account with the expectation of your money growing, depending on the number of years you save up. It is especially advantageous for the young ones to start making a savings plan in order to attain financial security much earlier in life.

Ways to Save Money for Your Kids

It may seem like a pretty daunting task, but teaching your children about saving goals will make them thank you in the long run for the gift of learning financial security at a young age. To start, consider following these steps when teaching your kids about finances.

1. It starts with a piggy bank

Once you teach them about the value of setting a savings goal, the next step is to introduce your child to the value of savings by giving them a piggy bank to store their saved-up money. Once they grow a bit older, consider getting them their own kiddie bank account.

2. Make them keep track of their weekly expenses

If you give them a weekly allowance, encourage them to write down their daily expenses. Based on how they spend money each day, make them come up with a realization of how they could save more money if they spend their allowance economically.

3. Allow them to commit mistakes

In the event that even after teaching them to spend less and save more and they still end up with no significant savings at the end of the week, do not be quick to point out their little financial mistakes. Instead, take it as a learning opportunity for them and a teaching opportunity for you. This can be done without going hard on your little aspiring money-saver. Committing mistakes is normal, especially if they are still too young to understand the consequences of their actions (or inactions).

4. Have a heart-to-heart talk with your kid

It might seem discouraging if your children don't seem to put even a modicum of interest in what you are teaching them, especially in something they may not have adequate knowledge of yet. But with persistent efforts, your children will soon realize just how important saving money is, and how you as their parent have been hands-on about teaching them the value of saving up early for their future.

5. Become a money-saving parent yourself

It's a cliche, but merely because of how it makes absolute sense: practice what you preach. Lead by example. Become a role model by setting up your own savings goals for you and the entire family. It could be as subtle as doing a monologue during grocery shopping and saying something about how commodity prices are skyrocketing and how important saving money is nowadays. Or you could be more straightforward while maintaining a kind tone and give your children a lecture about the importance of financial independence, and how this needs to start at a young age rather than much later in life.

Top 5 Benefits of Saving Money Early

If you're still not as convinced to start being conscious of the ways you spend and save your money, these five legitimate benefits of saving money early should help you realize its tremendous importance. Saving money early helps you achieve the following:

1. Financial preparedness

It pays to be prepared when something unexpected happens that will adversely affect your economic situation had you not started saving early. Life is teeming with surprises that adversely impact people who never imagined being in such a situation until they're in it already. The adverse financial effects of hospitalizations and other calamities can be minimized if you are financially prepared.

2. Compound Growth

Your money grows at a more accelerated rate the longer it is invested. This is because each year, your money earns compound interest on the money that was previously invested. Hence, the earlier you start saving, the more time your money has to grow. This can have a huge positive impact on your financial future.

In addition, you might want to invest in a diversified mix of assets that have the potential to grow at different rates. This includes low-risk financial investments such as setting up an emergency fund, to high-risk bets such as investing in stocks or mutual funds. In this manner, if one investment falters, you have others that can pick up the slack. Finally, don't withdraw all the money you have too early. Once you start reinvesting your earnings, compound growth really starts to work its wonders.

3. Safety from Economic Downturns

The coronavirus pandemic was one major culprit of the unemployment rate globally. Physical establishments were forced to close down to prevent the spread of positive COVID cases, not a few declared bankruptcy, and millions of people found themselves in desperate situations just to have jobs and survive in the middle of a deathly pandemic crisis.

Fast forward three years later, inflation followed suit, with the prices of basic commodities skyrocketing. Adverse economic circumstances like this can be assuaged if savings goals or a savings account have been set up long before these global catastrophes happened.

4. Setting a Great Example

Children look up to adults to copy gestures that are worthy of emulation. You can be a great example to your kids by helping them realize the value of money, how it is earned, and how they can be more financially smart by not only saving up but by saving up soon enough.

5. Reap its rewards come retirement

Many of us fancy a life upon retirement where we could just relax, read a book and just watch movies every day, and not worry about our finances. Your chances of attaining this prospect are remarkably high if you start saving at the soonest possible time.

Many young professionals also attain their dream affordable house and lot at a young age. Others told them it was impossible, but their relentless efforts toward saving money tremendously helped to achieve homeownership in their early 20s!

Lumina Homes witnessed inspiring stories like this when we came across young people investing in an affordable house and lot for sale in Lumina Pililla. This young, passionate couple juggled their studies and jobs to achieve their dream home and religiously saved up to fund their dream house and lot. It turns out that financially independent Pinoys don't have to wait for retirement age to achieve their financial dreams. It's possible even in your 20s or 30s!

If having your own house and lot is one of your major dreams, allow Lumina Homes gain the privilege of helping you achieve it through its quality yet affordable housing options. Rest assured that Lumina Homes will do its best to answer all your real estate investment queries such as, but not limited to, down payment, financing options, and even whether your monthly income suffices to establish your creditworthiness.

To help you seal the deal, apply for a housing loan either through a banking option, a financial institution like Pag-IBIG, or directly through real estate developers like Lumina Homes. Get in touch with one of our sales agents today and become a Lumina homeowner this year!