Ability to Drop Insurance Policies– A good example here is term life insurance. As people grow older, it becomes move expensive. Diligent savers, however, may not need a policy anymore, after a certain point, if their accumulated savings is sufficient to protect their loved ones. By Barbara O’Neill, Ph.D., CFP®, Rutgers Cooperative Extension, firstname.lastname@example.orgDuring January, many military families make resolutions to save money. Some people set up an automatic savings plan with a bank or employer while others follow the guidelines suggested by one of many available savings challenges (see this presentation).Find more info at http://militarysaves.org/The most important result of saving is having a sum of money available to use for emergencies or to fund future financial goals such as a vacation, new car, or retirement. With savings also comes peace of mind in knowing that you’re not on the “financial edge” with little or no money in reserve to handle negative life events.Having an accumulated sum of money and freedom from financial worries are not the only benefits of saving money, however. Rather, savings can enhance your personal finances in a variety of beneficial ways. Below is a description of seven positive side effects that can occur when people save money on a regular basis over time:Ability to Earn “Free Money”- Savers can take advantage of retirement plans that their employer offers. Deposits come right out of their paycheck, making it easy to save. Some employers match workers’ savings 25 cents, 50 cents, or even a dollar for each dollar saved. This is “free money” that should not be passed up. Ability to Self-Insure– Some people self-insure to cover the risk of needing long-term care (LTC) in later life instead of buying LTC insurance. Savings is earmarked for a nursing home or assisted living, if needed. Ability to Raise Insurance Deductibles and Increase Elimination Periods- With sufficient money in the bank, you can cut insurance premiums by taking on more of the risk of a loss. Examples include raising a car insurance deductible from $250 to $750 or a disability insurance elimination period (i.e., the time between an accident or illness and receipt of benefits) from 30 days to 90 days. Ability to Pay Cash for “Big Ticket” Items and Avoid Interest- When you save money for furniture, appliances, electronics, and even a car, you own it completely from Day 1. Use this worksheet to calculate what you need to save to reach your goals. Ability to Avoid Fees– People with ample savings can avoid pesky money-draining expenses such as fees for low bank account balances, late payments, and private mortgage insurance (PMI). Ability to Reach the “Crossover Point”- Savings provides “seed money” for long-term investing. Savings provides interest and investments produce dividends and capital gains. Eventually a crossover point can occur where savings and investments earn more money per year than the sum of annual living expenses.The only sure-fire way to get ahead financially is to spend less than you earn. Counting on a big inheritance or a settlement, or winning a big prize or the lottery cannot be guaranteed. Every successful financial plan includes some type of savings, which requires living below your means.In summary, saving money has many valuable side effects besides the actual dollar amount that is saved. It gives people freedom and options. For more savings information, see America Saves.