Savings is an act of self-love

If you cannot save, then the seeds of greatness are not within you. - Clement Stone

You do not need a reason to save a part of your income. You do not need any preachment on the virtues of saving some of what you earn or receive. You do not need any rationalizing or justification on the need to save. You do it for you. You do it because it makes sense. You do it because it gives you peace. You do it because it gives you options. You do it because it takes you off the cliff of anxiety and uncertainty and what ifs scenario thinking. You do it because you love yourself enough to do what is right for you.

In his thought-provoking book, The Psychology of Money, author Morgan Housel argues that we need to save money for the sake of saving money. The act of saving money, even if it means being just able to sleep well at night, or not wondering how you will pay the bills should the unthinkable happen and you lose your job or other source of income or something. Saving money could be the difference between something being a financial inconvenience, or a financial disaster.?

Before proceeding, we need to get certain truths out of the way. Firstly, the money you earn is not enough. You need more money, so saving will be hard. You are already maxed out, how then can you think of saving? Let us proceed to dispel the belief that you are maxed out each month and cannot save. In your city, or community, you are not the lowest earning person. Except if you live on minimum wage and food stamps, then chances are high that you earn a fairly decent income that takes you away from the bottom 10%.

The fact is that there are many people earning less than you who would think that only if they could earn as much as you do, then their lives will make more sense financially…and maybe they can also save. So the first step is the realization that no amount of earning is enough. Due to a little law known as Parkinson’s Law, expenses will always rise to meet income. So it has nothing to do with the amount.

Now that we know that you can save, why then are you not saving? The people who earn less than you do not eat from garbage bins. They still support themselves (and probably support a family), and are still useful members of their communities. Why then is it hard for most people to save? Why is the thought of setting aside 6 months worth of living expenses so alien to most people? Why do we focus on what we want today, instead of what we might need tomorrow? In the Psychology of Money, Morgan believes it is because these concepts are “alien” to us.

The idea of putting money away for the rainy day, or saving for retirement, or even just saving for the sake of saving was not popular with our hunter-gatherer ancestors. So in a sense, we do not have to blame ourselves because change is hard. It will take time. While you are contemplating how to put away an extra $200 each month towards your emergency or 6 month living expense fund, know that you are doing it for you, and not anyone else. It is a gift to yourself. Surely giving your future self peace of mind wouldn't be a bad idea right?

It is an act of love. So do it!?

Alex James,

May 20, 2022