Some things feel good, but aren’t good for us. Eating dessert, browsing memes, and incessant online shopping are all great examples. Other things are actually good for us, but don’t always feel good. Exercising, cleaning and earning an academic degree, all come to mind. Few activities fall right in the middle of that elusive feel good/good for us spectrum.
Saving money is one such unicorn. Just in case that the whole concept of having financial security doesn’t resonate enough with you to make you want to save, there are actually numerous other great reasons. Solid scientific evidence points to the finding that having money saved up can enhance your health, boost your mood, and even increase your chance of future success. But, what about the effects of not having a safety net?
This is your brain on financial strain
Inability to save is a vicious cycle. Money is short, debt is pressing and expenses can’t be spared. This leads to stress, which then propels various inefficient coping mechanisms – from taking out high interest loans, to smoking, and other destructive behaviors. What’s more, without sufficient money, it can be hard to live an optimal life as recommended by doctors: Exercise regularly, get check ups and blood tests on a yearly basis, sustain a vegetable-rich nutrition, and more.
Unfortunately, this is especially true when it comes to low income households, but even if you’re earning a steady, living wage, you might be struggling to make ends meet – not to mention putting money aside for a rainy day. It’s no wonder, then, that across all income brackets, 77% of parents, 75% of millennials and 76% of Gen Xers reported high levels of money-related stress. This has physical manifestations such as insomnia and migraines, making it harder to perform well professionally, and further risking placing earning.
Saving, it seems, has become a bit of a luxury in itself. The current state of Americans’ savings is alarming: More than half (57%) report having less than $1,000 saved up. This sum doesn’t go too far when you consider the cost of common unexpected events such as a mild health issue or a car emergency.
Thinking ahead, things get even bleaker. Nearly a third of the American workforce does not have a pension plan, including a fifth of those aged 55-64 – the next in line for retirement.
Even out of those fortunate enough to have a pension plan, 23% have drawn funds from their retirement savings account for other needs – and 35% of those who haven’t, say they’ll likely need to, at some point.
This is your brain on savings
When it comes to quality of life, making the choice to save is directly linked to better mood and decreased insomnia, leading us to perform better as employees, business owners, partners, friends and parents. These benefits are tacked on top of some more obvious ones, such as decreased stress, a more positive outlook and smarter investing.
To start, having extra income means greater ability to prioritize and invest in things that enhance our wellbeing. This translates to the freedom to consume high quality food, acquire a gym membership, having sturdy transportation to rely on, and even more durable apparel.
Even with all of these bases covered, you’d still want to indulge from time to time – and with savings, you could afford to. Having a savings fund provides us with flexibility to choose indulgences such as vacations and special activities. This is very different from feeling so deprived we opt for harmful indulgences such as unhealthy foods, smoking and other harmful substances, which can deteriorate health and finances even further. Positive indulgences such as occasional shopping, going to a nice restaurant with a friend, getting a massage and taking a vacation all cost money, but when they’re properly budgeted for, they have a tremendously positive effect in alleviating stress and improving our relationships.
Having better relationships is another luxury savers enjoy disproportionately. Saving means having the ability to see loved ones often, even if they live far away. It also empowers us to support friends and family when necessary, giving everyone priceless peace of mind. Now there’s an accomplishment you can celebrate. . However you look at it, healthy savings amount to a more present you – and isn’t that precisely what it takes to enjoy long lasting, stable, high functioning and loving relationships?
In a 2015 survey, Aegon found that contributing to a 401K can actually empower you to react proactively to bad news. Savers were more likely to take action instead of wallowing, when confronted with upsetting news. This is related to ‘time discounting’ – the fallacy that we can trade the future with the present (live for today instead of for tomorrow). In fact, this fallacy is largely responsible for people not saving in the first place!
Which leads us to the final benefit of saving: Confidence. Saving summons a subtle but powerful sense of control over one’s destiny, and the ability to overcome crises. That kind of confidence can only come from having a safety net.
It’s easier than you think
Believe it order not, being up to speed on your savings doesn’t necessarily take a high salary. Start small: Reduce your regular bills, get a side gig, automate your savings, and work your way up to significant savings without radically altering the way you live your life. If you’re determined, you can stop living paycheck to paycheck and reach financial security on your own terms. Now, there’s a mood booster.