Back in the 60s, Dionne Warwick was a household name. She belted hits like “I Say A Little Prayer” and “That’s What Friends Are For,” which are played today. Unfortunately, despite her career success, she filed for bankruptcy in 2013. Being a celebrity doesn’t spare you from the consequences of not saving money.
In fact, nothing saves you from the consequences of not saving money. The same thingshappen to everyone who thinks that saving for the future isn’t a priority. Don’t think you need to save money? Well let’s take a look at the consequencesone by one:
Financial Consequences of Not Saving Money
When you don’t save money, you will probably end up regretting it later on. Here’s how not saving money will affect your financial situation.
No financial freedom
Being financially free is an amazing feeling. You can buy whatever you want without worrying about how you’re going to pay for it. Feeling financially trapped is one of the main consequences of not saving money.
Want a glimpse of what it’ll be like to be financially free? Check out my article on what it’s like to be debt-free.
Always at the risk of a financial emergency
Many people are one financial emergency away from bankruptcy. You don’t know what might happen tomorrow so it’s best to be prepared. You don’t want to have to worry about your car or mortgage payments while confined in a hospital bed.
No risk tolerance
High-risk, high-reward investments can help grow your wealth to new levels. However, if you haven’t saved up enough money, you may not be able to stomach risky investments. You don’t want to dump half of your net worth into a cryptocurrency only for it to come crashing down.
No way to build wealth
One of the consequences of not saving money is being financially stagnant. If you don’t make plans to build your wealth, your money is only going to lose value over time.
Even retirement accounts require you to save money. If you want to learn more about them, check out my article on the Roth IRA!
Higher likelihood of debt
What’s worse than not saving money? Owing money.
When you don’t have enough money saved up but need it ASAP, you’ll likely have to take out a loan. While it will be of immediate help, debt will make it harder to progress toward your long-term financial goals.
While you should try to avoid debt when you can, you can still pull yourself out of it. That’s what I did, and I learned quite a few valuable life lessons as a result. Check out my article if you want to know what they are!
Social Consequences of Not Saving Money
Many consequences of not saving money are associated with your social life. Here’s what some of them are:
Can’t join the girls on trips
Imagine your group chat blowing up when your friends are talking about taking a 5-day trip. As much as you’d like to go, the trip would cost more than you’re willing to spend. Then you’ll have to see your IG feed full of pictures of your friends sipping from coconuts without you.
Having to skip major life events
It feels horrible to be invited to someone’s wedding and have to decline the invitation. While that person explicitly wanted you to be there, you have to say no because going would bankrupt you. It’s a tough position to be in, so try your best to avoid it by saving money.
You can’t help your friends as much
Got a friend who’s fallen on hard times? As much as you’d like to help them out, you can’t if you’re not in any position to do so. This is one of the consequences of not saving money that isn’t talked about much.
No gifts
Whether it’s a birthday gift or Christmas, if you haven’t saved up you won’t be able to buy a gift. While most adults will understand, some kids may hold a grudge if they don’t receive anything.
Less time to spend with loved ones
When you have no money in the bank, you’ll probably want to spend more time working and earning. Unfortunately, this will mean you’ll have less time to spend with friends and family.
Mental Consequences of Not Saving Money
Not saving money is bound to have consequences on your mental health as well. Here’s how it will affect you:
You’ll feel trapped
More money means more options for yourself. One of the biggest consequences of not saving money will be that your options, in general, will be limited. You won’t be free to enjoy the finer things in life like you deserve to, sis.
You’ll feel stressed
Having no money in the bank is one of the most stressful feelings in the world. It means that if anything bad happens to you or a loved one, you’d be in financial trouble. When you’re in this position, it’ll be hard to sleep at night.
You’ll feel left out
Watching all your friends on social media enjoy themselves and their money will be hard. ne of the consequences of not saving money is that you will wish you had at least tried.
You’ll be more easily tempted to go into debt
With no money in the bank, the temptation to reach for your credit card will be at an all-time high. While debt can help if you need a home, you shouldn’t have to rely on it for your next meal.
You’re more likely just to keep putting it off
Of the many consequences of not saving money, this one will hurt you the most. The longer you put off the habit of saving money, the harder it will be to build in the future. If you want to avoid all of these consequences, it’s best to start saving money ASAP!
Do you know what else you should do ASAP? Sign up for my money squad! As a member, you can expect free financial advice every week. Signing up won’t even take a minute, so become a member today!
