Financial advisors always talk about the importance of saving money. But why? And how? Here’s the primer seen through the lens of personal financial planning.
How does saving money contribute to your financial planning?
One of the awkward facts of life is that money comes into our lives in a different rhythm than we spend it. Saving helps resolve that awkwardness. Saving money is a means of moving personal wealth from a time or state when you have it (i.e. when you have reliable income and good health) to when you don’t (when income stops and/or you have a financial emergency). Think of your pool of savings as a reservoir helping to even out the incoming and outgoing flows of cash.