Saving for a Rainy Day?

Whenever we read about an emergency or natural disaster on the news, many of us wonder what we would do in such situations. And on the heels of that: “I better start saving now.” 

In other words, the prevailing feeling tends to be that savings are always for a future emergency – the proverbial ‘rainy day’. But is thinking like this actually useful? 

In reality, it’s just a common misconception that savings are only safety nets for future calamities. Here are 3 important reasons why we need to change the way we think of savings: not as an emergency fund, but an essential financial strategy with a host of benefits. 

1. You Gain a More Positive Outlook

When you save only with the mindset of “What if X happens?”, you will always see money only as an instrument to help during an emergency. But saving can enable you to do so much more! 

Instead, when you start saving with the mindset of “If I save this much every month, I can make Y investment, or go on a big vacation to ABC or finally buy that house,” you begin to see money as an instrument that, when backed by purpose and a proper plan, can elevate your position in life to something better instead of just preventing you from getting harmed. 

2. You Will See More Opportunities (Even in a Down Market)

When the market is down, prices drop. Whether it’s shopping, travel, stocks or real estate, rates can sometimes even see a huge plunge. 

Instead of being afraid, this is a fantastic opportunity for a savvy investor to buy assets at a discounted price that you can sell later on for a good return once the market has got back up. 

So, if you have a strong strategy and proper planning, you can to take full advantage of such market scenarios would otherwise be seen as an unexpected emergency. 

3. It Enables You to Be Better in Many Ways 

By now, you should have understood that savings are more than just an umbrella. Once you start saving not just from a safety perspective but rather in a more strategic manner, you’ll be overwhelmed by all the different ways your financial horizon opens up. 

It all starts with a change of mindset: from “I am saving X amount of money in case something goes wrong tomorrow” to “If I maintain my savings at Y% for the next 18 months, I can invest it in my dream plan” – whatever your dream is. 

You will definitely see a lot more options opening up once you start thinking of savings in a new, dynamic way.  So, rather than saving out of fear, always do so with a clear plan and concrete goal. You’ll then be able to execute a lot more than you can ever imagine. 

You’ll become a lot more positive mentally and financially as you look forward to better days that will bring joy and success rather than calamities to fend from.