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Is the dollar you earned as strong as the dollar you just put into your savings? The simple answer – no. The reasons why are simple too.

Every dollar you earn is taxed, whether up front or in the end. If you are taxed at 25 percent, your $1 earned turns into only $0.75 in your pocket. That $0.75 is now yours to do with as you please. If you put it in savings, you don’t have to replace it. If you spend it, you have to earn another $1 to replace it.

Let's say you have decided to save many of your hard earned dollars and you now have $1,000 in your savings. Just think, if you had spent that money instead, you would have had to earn $1,250 more to replace it.

Still, knowing you've lost a little to Uncle Sam, you can now start recouping that money through compound interest in your savings. This is a chance to redeem your dough without having to work to replace it.

The interest you're collecting on your money is going to come in handy one day. Whether it secures your income during a job loss or is used to replace an appliance when your old faithful falls apart, you'll be ready.

The next time you think about making a purchase with your money, just think about how much work it will take to replace that money. Live comfortably, but with a savings plan in mind to help strengthen the money you earn and lessen the amount of work it takes to keep it.

Source: Cash Money Life