The real reason why saving money is important

Understanding why saving is actually important — and how to make it happen — might be the fuel you need to get started.

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One major benefit of saving is the potential to avoid debt. Life is full of surprises, from being laid off, to breaking up with your partner, to running into unexpected medical bills, to suddenly having to care for a dependent.

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If you don’t have any money saved, these situations have the potential to upset your financial plans. Some may have to turn to high-interest credit cards or payday loans.

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If you miss payments, your credit score could suffer (making it harder to take out loans with good terms down the line).

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Another big incentive to save is the power of compound interest. Compound interest means you earn a return not just on the amount you originally put away, but also on the interest that accumulates.

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