09:27 24 July 2013
Figures revealed that typical British families have barely any savings and if something happens to their regular source of income, they could be joining the breadline in less than three weeks and experience financial problems almost instantaneously.
This alarming scenario is not only happening in the UK but in most parts of the world hit by recession and inflation. Many families have suffered from disposable income shortfall while prices of commodities continue to rise. Despite cut back in expenses, they might have begun using their savings just to cope with basic expenses.
It is quite obvious that in difficult times, the ones who will have a lifeline are those that have proverbially “saved for the rainy days” and have some forms of investment.
Currently, saving levels are on the rise. But we see this happening only for those in the higher income bracket. Individuals living on a pay check to pay within cycle always say there is nothing left to spare for savings. That could be the biggest folly of income earners because even the littlest of amount saved can be worth something years after.
Even the most well-known and respected pundits of the financial community passionately endorse saving as the surest way to achieve financial independence. Just look at this example - if one saved and invested £1,000 at the age of 20 with an average yield of 7per cent a year, at the age of 65, you will have £285,000.
Why do we have to make sacrifices just to save something? Because saving is one form of paying yourself for all the hard work you have done throughout your lifetime and also a way of taking care of yourself when you can no longer work in the future.
It is possible to enjoy your earnings today and in the future. How can we save? Simple - just spend less than what you earn.
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