The emotional side of savings
Money is more than just numbers. Money is also a very emotional thing for most people. While having a savings account in a bank may not be the wisest number decision, it is often the best thing you can do for yourself because of the emotional side of money.
When you have a savings account with 3-6 months worth of money in it the following things happen:
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- You make wiser financial decisions and investments. When you are faced with financial hardship emotions often get in the way of good financial decisions. If you have a nice safety net, the emotions are usually taken out of the equation and you base your financial decisions off a solid logic and good sense. So, if you want to be better with your money, then remove emotions from the equation, and learn how to be better with your money. People with money are usually smarter with their money. They are protecting what they have worked so hard to save, and they are not worried that their investment or financial decision could lead to their financial ruin.
- You have a safety net. Having a savings account gives you a safety net, which having helps you to alleviate many of the issues that can happen when you don't have a safety net. A safety net removes the emotion because you are not risking so much to make an investment etc. People are emotional with their money. Money buys power. Money provides security. Money is how you get clothes, food, a home, etc. so it is no wonder why you get emotional with it. However, when you have a savings account that is large, and provides you with a safety net, suddenly, whether or not you have food on the table, clothes on your back, and a roof over your head is not in question anymore. That safety net protects you from having to get too emotionally involved with your money.
- You have motivation because you see what you have accomplished. When you save money emotions can be used for good. So far all we have looked at is the risky side that emotions bring out, but you can use your emotions as a motivator. When you save money and you see your savings account growing, and you feel less pressure, you get motivated to keep it up. You get the reward of joy and peace, and that catapults you into more aggressive saving. The bigger your savings grows, the bigger your motivation to keep it, protect it, etc. grows. This can be a great tool for someone who is trying to curb spending and cut down on expenditures.
When you have a savings account with a good chunk of money in it, you have effectively addressed the emotional needs that you have where money is concerned, allowing you to now invest your money more wisely, and feel good about where you are financially. People who have savings, are not as emotionally tied to other money, and this gives them a great sense of freedom with their income.
