Ep 122 | Why the Importance of Saving Money Can’t Be Ignored

In today’s episode, I’m diving into the importance of saving money and how this single habit can completely transform your financial journey. If you’ve ever wondered why saving is such a big deal or how to actually stick with it, this episode will give you all you need to know. 

I’ll walk you through eight (8) powerful reasons why the importance of a strong saving habit is key to managing money with confidence. From eliminating debt to growing your wealth, saving consistently is a foundational skill you don’t want to overlook.

You’ll also hear practical tips on how to develop a saving habit, plus how to overcome the common obstacles that can stand in your way.

What You’ll Learn

✅ Why the importance of saving money goes far beyond just having an emergency fund

✅ The real value behind developing a saving habit even if you’re starting small

✅ Actionable strategies to build consistency and become the saver you want to be

✅ Mindset shifts and simple tools to overcome the excuses that have kept you stuck

Ready to Get Clear on Your Retirement Path?

Book your free Confidence Kickstart Call and in just 30 minutes, you’ll know what’s standing between you and retirement, and how to overcome it.

👉 Click here to book your free call now

Or, grab one of my free resources to help you take the first step:

5 Must-Do Steps for Retirement Planning — A simple guide to help you prepare with purpose

Retirement Ready Checklist — Make sure you’re not missing a single step on the road to retirement

Transcript

 Welcome to today's episode of Wealthy After 40, where I am going to share with you why I know savings is the number one financial habit. Savings does so much for us, and I'm gonna start out by sharing with you eight different things it supports. Directly right from being able to be a saver.

The first one, it creates an emergency fund and sinking funds. Being able to save for a medical emergency, for a car repair, for a home repair, protecting us from going into debt more. Number two, savings habit helps us pay down debt. Number one, we have to have that amount for that payment.

And number two, if we wanna pay it down more quickly, we need to know how to save, we need to find savings to be able to do, to contribute to paying down debt. Three. It helps us build awareness around our spending. As we start thinking about saving when we go to spend and it's leaving our hands, I think we're a little more aware of the why and the what and the how, and if evaluating if that's what we truly intend to happen with these monies.

Number four, it helps us prepare for sending kids off to college. Number five, it prepares you for retirement. If you're not able to save for the future, retirement's going to be pretty bleak. Number six, it softens the effects of job loss. So if you have a bucket of money. And you lose a job or you have a reduction in hours or maybe even a reduction in pay for whatever reason, having that savings can help soften that effect.

The thing still happened, but financially we can start making decisions because we're okay for a moment. Number seven, it builds a buffer for times of inflation. We've just experienced inflation, we know, so being able to have a savings and being able to pull back from that to cover those increases in costs for the things that we have to have, , utilities, fuel, groceries, those things aren't going away.

We need to be able to support the inflation, and that typically is done with savings. And number eight, saving helps us build wealth. If we are not saving, we are not building wealth at all. Saving is the cornerstone of financial stability. Financial stability is the first level of financial freedom.

We need to achieve that to even start our path to financial freedom and financial stability helps us be able to react to most life events. Being prepared, as I was talking about for medical emergency many years ago, my dad was in ICU after a bypass surgery. Yes, most people are in ICU for a certain number of days, but typically very few.

He spent nearly a week there. Because they had been savers, I knew I didn't have to worry about money for them. I just got to worry about his health and his wellbeing. So really having that savings to kind of lessen some of the worry that we have around, these life events that are going to happen is huge instead of being able or having, to stress about the financial side of it as well.

A study by the Federal Reserve found that nearly 40% of American households struggle to cover an unexpected expense of $400 without borrowing or selling something, $400. Having that much saved is really a drop in the bucket. I know for some of you. You know, the minimum life expenses are up there, but most of us are not living at that point.

Striving to even just create a savings of a thousand dollars, it really should be something that all of us should be doing first and foremost, having an emergency fund can prevent us from falling into debt and financial distress. Set yourself up for stability instead of being financially fragile.

The power of savings protects us, prepares us, and helps us plan for the future. All right, so how can you start saving? I got a couple strategies for you here that you can start taking away. a couple of these to help help you start moving forward on your savings or help you even get stronger in your savings.

But first and foremost, we should be budgeting and tracking our expenses. There's many ways to do this. I've shared an episode about budgeting and tracking, so go back and look for that. It is also something I support in financial coaching, if you're still struggling with this step, please reach out for help.

Number two, really automate savings if at all possible. It's a huge jump in the right direction. Behavioral FI finance, they have consistently shown that individuals who practice discipline have longer out, longer have better long-term financial outcomes. Behavioral economists like Richard Fowler have demonstrated the importance of automatic savings plans in helping people, have this better outcome.

At the point you're able to create it automatically. For whatever direction it needs to go right then, that should definitely be something that is happening. Number three and four kind of go hand in hand. If you're looking for savings, we either have to reduce our expenses or we need to find additional income.

So additional income not, is not necessarily a second job, but  you can sell stuff around the house. You can if you have a hobby that you can sell stuff to make money that way, there's all different ways to find savings. The next one, if you're somebody who struggles maybe slightly with actually making this happen there's some savings apps out there that can help support you, help you get started.

maybe a different way of tackling this if the, traditional ways that I've mentioned up above haven't worked for you.  Here's three. There's several out there. You can, go search yourself. But acorns, it's been around for a while. I used it way back in on my, earlier on my journey, but it rounds up your purchases, so as you're purchasing something it rounds it up to the whole dollar and it.

Puts it away into savings. I actually believe it. It might invest it. But I haven't used it for,  many years.  double check on that. A second one was capital Q-A-P-I-T-A-L. This one was a very interesting and that you got to set up your own set of rules. So where Acorns just rounds up purchases.

This one mentioned that if you were gonna go get takeout or eat out. And it was $20 that you would save $20. Being able to create that own rule, especially if you're a spender, and have that, but you've set it up, you've created it keeping you on track for savings. And the last app I want to mention is Opportune, O-P-O-R-T-U-N.

This is more of a reactive, so on the back end where it analyzes your account for savings. What's going out? What's coming in? Is there anything left over not affiliated with any of these. These were just three I found to provide you an idea of a different way to power up your savings. I. And the last one is if you do struggle and you're like, I can't do those apps, I don't, whatever reason they don't resonate with you, create your own savings challenge.

If you go to Google and type in savings challenge, there are many, many, many out there. You can create your own follow one out there and, get in the spirit of, making it a game I think sometimes helps and we identify with and so we're able to. You know, save more easily.

 back on my journey I came across at Challenge. It was a 1% challenge and it was having to do with the automation. I knew how much I was saving. I had that inner percent, and the challenge was to increase that by 1% every month until it hurt. So myself, I think I got about five or six months out of it.

That's five, 6% of what. additional savings on top of what I was already doing. And then you fill the pinch 'cause you're like, ugh, things are getting tight in the budget. And so you pause. And so I would pause for about, 3, 6, a little bit longer depended. I did this more than once.

It would depend on how, high, my percentage was already to be able to go more without having received, income additionally, and without it decreasing my expenses. Those two things had already been tackled, but that was a fun, it challenged me I was able to get out some more savings than I thought I would be able to.

Take one of those ideas to get you going but you're definitely going to have to overcome some obstacles. Debt is one, we talk about that in a different episode and a little more in depth. Especially if it's a high interest debt. It's really going to eat, eat into your ability to how much you can save.

You'll want to work on that first and foremost. And the second thing is something that I don't think it gets talked about enough is lifestyle creep, lifestyle inflation. You receive a raise and. You spend it. Understanding, that lifestyle creep can have its impacts. One way to get around that is before you get a raise. Before that happens, so don't do it. When you get the raise, I want you to make this before. If you're gonna, that you're going to save half of it and then you can spend half of it, or whatever percentage you relate to.

Maybe you have, tight expenses and you need a little more freedom there. You could do 25, 75. I just would not 100% negate the savings. But be sure that before you get the raise, you've already identified exactly what you're going to do with it. The importance of savings and being able to save.

We have to be disciplined and patient. It's hard, life is hard. Life is, we have to be disciplined in so many areas. We have to be patient in so many areas, but being able to save and being able to. Create this discipline, I believe comes from determination and commitment. The best way you can do that is by setting goals.

Now, goals have to cover short term and long term. Now, when you are thinking long term and short term, midterm, long term, but when you're thinking long term, I want you to really dream that dream. I want you to, as. As we have gotten older, we lose that ability to free, be free thinking and free dreaming, because we're always told, there's no way you can do that.

There's no way you can do it. I want you to drop those boundaries and those barriers as you are thinking of that ultimate long-term financial goal as that ultimate, and all of them within between. When I set out my goals. When I started out on my journey, I thought it was crazy for a couple of 'em that I had in there.

I'm like, there is no way this is going to happen. But yet I was determined and committed to do it.  Instead of just setting a goal, I want you to dream that goal. I want you to dream. And then if you are that individual. Who, when somebody says, there is no way you can do that, that you want to prove them wrong, I want you to take that.

Tell yourself as you've made this dream that there is no way you can do this, and then I want you to prove yourself wrong. This is where you get the determination and the commitment to start going forward. I know I have talked to many people, they have dreams, but they're so hung up in their obstacles that they're not determined to get past them.

I remember being at the beginning of my retirement planning journey, and I knew I needed to increase my savings. I looked at my savings account, specifically my retirement savings, and I thought there needs to be more no matter what. I knew I needed to get this growing. And the best advice I received was saving as more important than the actual investment choices I also needed to make.

I had been budgeting, but not necessarily with a focus on savings. I realized that with a few intentional TRAs tweaks and a system to track what mattered, I could start saving smarter. Being focused helped me to stop second guessing every purchase and plan and learn how to enjoy my money while also on my saving journey.

That's exactly what I help do. Oh.

I remember at the beginning of my retirement planning journey, I knew I needed to increase my savings. I looked at my retirement savings account and thought there needs to be more no matter what. I knew I needed to get this growing, and the best advice I received was saving is more important than the actual investment choices I also needed to make.

I had been budgeting, but not necessarily with a focus on growing my savings. I realized that with a few intentional tweaks and a system to track what mattered, I could start saving smarter. Being focused helped me to stop second guessing every purchase and plan that I didn't have to keep recreating and learn how to enjoy my money.

For the current time while also saving for my future. That's exactly what I help women do inside the retirement Ready VIP session. If you're unsure where your money is going, if you're worried about whether you're saving enough or making the right decisions, I invite you to join me. This one-on-one coaching session, we'll walk through your full financial picture, your savings, your spending, and identify any gaps that may be holding you back.

Together we'll create a clear action plan that helps you save with ease. If you're ready to build momentum with your savings and start making progress, visit www dot Elevate Finances us slash VIP session to book your custom session today.

Learn to build that muscle. Take something away from this episode that helps you move in the positive with your savings. One thing I'm sure resonated with you in there, that you're able to make that change, that you're able to, increase that savings just like I did with the 1% Savings Challenge.

Really do, dig deep and do it if you think you can't. I want you to prove yourself wrong, prove others wrong, and really start doing it. The most important takeaway today is by starting small and start creating the habit. Create the habit, create the muscle, build it up as strong as you can, and financial stability and security is right around the corner. 

And please, listeners, if you can subscribe, rate and review the podcast so others can join us on their money journey, I would greatly appreciate it. Have a wonderful day and we'll look forward to next week.