15 Amazing Benefits of Saving Money (A Few May Surprise You!)

cash: benefits of saving money in the bank in college and at a young age

You already know you should save. But did you know that there are amazing benefits to saving money right now? These advantages will make you nod your head “yes!” and a few will even surprise you.

This article gives you the facts, motivation, and tools to increase your savings today!

Best Benefits of Saving Money Early

First, let’s explore the benefits of saving money at a young age. These are great for students. And even if you don’t consider yourself “young” anymore, they are fantastic reasons for starting sooner rather than later! So, quit procrastinating!

1. You Learn Quickly

Trying something new requires that you make a few mistakes. But if you learn how to save early, you also get your “oops” moments out of the way. And you bounce back faster as a result.

2. Compound interest is on your side

good things to save up for in the future: investing with compound interest

Your money compounds the more time you give it. Note how much more a 25-year-old has than a 45-year-old after saving and investing $400 a month for a conservative 5% return.

  • A 25-year-old saves and invests until they are 65 – and ends with $580,542.92
  • A 45-year-old saves and invests the same amount until they are 65 – and ends with $158,981.91

3. You put yourself on the right path

And the most important benefit to saving early? Creating solid financial habits.

Building new habits is much easier than breaking old ones. So, you can spend 15 years digging yourself out of a hole, or you can get your act together now and save yourself from a thousand future headaches.

Massive Advantages Saving Offers

Next, these benefits to saving money may have been unknown to you. But the numbers will show that they are worth a second look!

cash: benefits of saving money in the bank in college and at a young age

4. You Pay Less Than Everyone Else (For The SAME Things)

Here are a few examples of when saving upfront helps more than you realize. Don’t underestimate these. This is what makes you wealthy over time.

Home

If you save 20% for a downpayment on a home, you avoid paying private mortgage insurance (PMI). (An insurance that benefits the lender, not you).

We bought our first house with less than 20% down and our PMI was $100 a month ($1200 a year). We would have been $6,000 poorer after 5 years had we not made a change.

Car

The most common car loan length is 72 months (source). And the average used car price is around $33,000 (source).

According to Nerd Wallet’s calculator, if I finance a car using these terms with excellent credit (and 0 down), I’m paying $5,818.82 more for the car than if I had saved ahead.

benefits of saving money in a bank account for the future

Related: Free Debt Payoff Trackers

Retirement

Up to 41% of employers offer to match 401K contributions 4-6% of their salary (source)

If your annual salary is $50,000 and you add $2,000 to your 401k, they will also add $2,000. This is free money, just for saving!

There’s another benefit to saving more in retirement as well. You can sometimes pay fewer investing fees if you invest a larger amount at once.

Annual Subscriptions

For many services, if you pay upfront, you get a discount of 10-30%. I do this for at least half of the business subscriptions I use.

5. You Pay Fewer Taxes Too

And as though the examples above weren’t enough, saving also cuts your tax bill massively. Here are a few examples:

tax advantages and benefits of saving money from your salary
  • IRAs & 401K contributions are tax deductible upfront, while Roth IRAs are tax-free when you withdraw. (Vanguard)
  • Saving in a health savings account is tax deductible AND is tax-free when you withdraw for eligible medical expenses.
  • If you save in a 529 college fund, most states give you a tax benefit.

You’ll pay a lot less to the government because you saved.

6. Saving Allows You to Invest

Now you’ve seen many ways saving benefits you. But there’s even ANOTHER reason to save.

Saving is the seed to investing.

And this is where the real fun comes in. Instead of paying an extra $5,819 for that car (above), you’re able to invest it instead. If you do a little research beforehand and leave it in long term, it is likely to grow.

the difference adds up: saving money benefits and advantages

Ten years later, your first decision to save up for your car means that you have over fifteen thousand dollars more in your bank account than you would if you had financed.

How cool is that?!

Related:

7. You Reach Your Life Goals 10x FASTER

And as you can see, the real benefits of saving include living the dream life you want. Travel trips. A nice home. Retiring early. Helping make your kids’ college dreams a reality.

Those are suddenly within reach.

Life Benefits of Saving Money For the Future

Now that we’ve explored the specifics, here are the ways in which saving money benefits your overall well-being and quality of life too.

8. Security

Everyone wants to feel in control of their own life! Money in the bank makes you feel safe and secure. You call the shots. Not your lender or your employer.

9. It Keeps You Out of The Debt Cycle

Having an emergency fund for unexpected expenses keeps you from being forced to borrow money. This cushion is your insurance for staying out of the vicious debt cycle.

Related: Build a holiday fund ahead of Christmas!

10. It crazy reduces stress

why do I feel guilty spending money? Why am I struggling to save money?

By living below your means, you don’t have to feel this way anymore.

11. It Teaches You To Think Long-term

Thinking and planning for the future is a valuable skill. And it affects more than just your money.

Spending time with your spouse now protects your marriage later. Choosing the salad over the candy bar means better health in a year.

Sometimes saving takes a little sacrifice. But if you can think of the future, you make that decision more easily.

12. Saving Provides Flexibility

Take a sabbatical, stay home with the kids, choose your job hours, or start your own business. One of the best benefits of saving money is the opportunity it provides.

More Benefits of Saving Money for Retirement

Next, as if I haven’t convinced you enough, here are two more beautiful benefits to saving money for the future.

couple walking along the beach

13. Financial Independence

If you take saving and investing seriously, you will eventually become self-reliant. You will no longer need your employment for money. And you won’t have to ask your kids for help in retirement.

Related: How to Live Better & Save Money

14. Your Beautiful Legacy

Next, the best benefit to saving money for retirement is that your cup will be so overflowing that you will be able to help others as well. Use your retirement to volunteer, donate large sums to causes you believe in, and mentor friends and family.

15. BIG Benefit of Saving Money From Your Salary

Want to save more now? Pay yourself first. This means that you set up an automatic transfer from your paycheck to a savings account – before it hits your checking account.

You’ve never seen the money, so it doesn’t hurt to let it go.

Start Reaping The Benefits of Saving In The Bank

There you have it, 15 beautiful reasons to save money for the future!

Not sure where to begin?

Try Out a Money Saving Challenge

We have plenty on the site that will inspire you to save:

nickel savings challenge tracker pdf

Increase Savings Over Time

Start small now. Then, as you get the hang of saving, build over time. Increase your savings as your income builds or you get bonuses and tax refunds. Or start a side hustle that goes straight to savings.

Other Ways to Stay Motivated

digital money vision board examples and ideas for debt free finance

Need more reasons to save money? Check out these 100 things to save up for!

The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought, and so broadens the mind.

– T.T. Munger

Best Benefits & Advantages of Saving Money

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