Saving money is obviously an important action to be taken to maintain strong financial health. It’s something that too many people don’t do, despite being widely encouraged to do so. On the other side of the coin, there are some people who actively save. Within that group, there are some that are passionate about saving.
I’m in that latter camp. As I’ve gotten older I’ve taken a closer look at my finances and projected where I am compared to I would like to be long-term. The results of this analysis have pointed me in the direction of increasing my savings rate. Of course, one can only save so much; if you grow income concurrently, your savings increases further.
Clearly, there’s something motivating me, might you agree? This “long-term” notion I mentioned at the beginning of the prior paragraph naturally points to a future a need for money.
Ok – so that’s nothing different than saving from retirement, right?
Perhaps. But it goes further than that.
While some savers are motivated to squirrel away money for specific items (house, for example), paying off debt, or for a retirement filled with world travels – I’m primarily motivated by one thing: not being old and broke.
Sure, I have other “aspirational” motivations, such as a glorious retirement filled with traveling around the world, living in a very nice home, spending lots of time with grandchildren, generously giving to those in need, etc. Actually, I what I would really like is financial freedom as soon as possible.
Let’s get that party started quickly!
But really, it’s that avoidance of being old and broke that’s at the foundation of my interest in saving. I had always had that in some far corner in the back of my mind, but my recent increase in time spent downtown here in Chicago – as opposed to the suburbs – has increased my daily exposure to people begging for money.
Now, the area around Michigan Avenue is a fantastic area with VERY expensive real estate, particularly for here in the Midwest. Additionally, it has what in my opinion is the highest concentration of fine shopping, dining, and hotels in between the East and West coasts. That said, this perceived prosperity draws a few beggars at times.
I really don’t like to see this, and it’s not because I’m annoyed at them for being lazy. Well, it might be for some of them, particularly those in their 20’s and 30’s. But mostly, I just don’t like to see people in a position where they have nothing – no money, no home. Call me a softie, that’s fine.
What really gets to me, however, are the older people who I have seen. While being on the street probably ages people, a few of the people I saw clearly looked to be 65+. The first such person I saw was a woman, the second one an even older man.
That could be someone’s Mom or Dad out there!
Now, who knows what happened in their life to get them to that point. Maybe they did some bad things? Or, maybe they had just one or two bad financial decisions or life events and they were out on the street? Tough to say.
I give a few dollars to people such as this. Hopefully an exceptionally generous person will step up and do more.
Anyway, once I acknowledge that I feel bad for them, I start to think “I don’t want to be them. Ever.”
In the hierarchy of financial motivators, that’s at the top of the list for me. Or maybe a better way to think about is that it’s at the foundation of my personal finance hierarchy of needs.
What motivates you to save money? Not superficially, but at your core. Why do you, deep down, feel the need to save?
In the so-called third stage of personal finance, what motivates us is having enough. Once we have enough we just don’t need any more.
Back when we were in graduate school, in addition to the things you mention above, something that motivated us to save was the lack of apartment space. Anything we bought would have to swap out something we had.
What motivates me to work, though, is the thought of living down in a van by the river.
Nicole – that idea of swapping out something when getting something new is a really good idea for many of us, even if living in something with some space. People tend to accumulate stuff – I know I do. The thing is, we don’t use or need much of it, but someone else could. De-clutter, and swap out old for new as you suggest
I hate working. I don’t mind doing work for something I love (like blogging), but I dislike having to show up from 8-5 5 days a week somewhere just so I can afford to live. That’s why we save 30-40% of our incomes towards early retirement. It’s actually just early financial independence from crap we don’t want to HAVE to do…
BFS – The idea of working because you WANT to rather than because you HAVE to is quite an aspirational thought for many of us, but it looks like you’re on your way with savings of up to 40%. That’s great. You guys clearly get it.
It’s simply fear of failure and the desire for freedom baby!
Also, the desire for a $300 million mega yacht perhaps one day, as I wrote over at FS…. I kid… maybe 🙂
Best,
Sam
The Yakezie
I’ve recently become increasingly active in planning my retirement for just this reason. I’m not worried about becoming homeless; I think people who are truly homeless aren’t there because of poor financial planning (there are other issues behind their homelessness – alcohol, mental illness, etc.)
However, I don’t want to end up living in a small apartment eating cat food and living on a measly social security check worried about how I will pay for my next meal of cat food! I also don’t want to be limited in my choices of medical care. For instance, if I live well past a certain age and need assistance, I don’t want to end up in a low-income nursing home in some run-down area. SCARY! There’s one of these not far from my home called “Ficket Towers.” Well, you can see how I might play a game of alliteration and call it “F@$^it Towers.” I really don’t want to end up there!
So, I’m on a path towards financial freedom as well.
Little House, that’s funny! Not that I laugh at the plight of the folks there, but the alliteration can get you to a good interpretation of what I might be thinking going there. That’s why I want to save – I don’t want to be broke or go to a place like that.
I save because I want to ensure that I can keep the life I’m used to living (or make it better). If you want to get technical, I guess I save because I’m fearful of the unknown and know that money can get you out of a lot of tough situations.
Jenna,
Great last line. Money can get you out of a lot of tough situations. Money talks, and it can help in innumerable ways when one’s a tight spot.
For me, I was poor growing up..so I guess I never want to go back like that. It’s always about security and knowing that you never have to beg or feel helpless. Plus, working hard and saving money are important values to me.
Lop, well said about security, not wanting to be helpless, and wanting to work hard and save. It would be great when older to know that you’re not a burden. That’s what I’m hoping!
I am simply motivated by an inner desire to achieve financial independence. I know it’s a boring answer, but it is oh so true!
Kind Regards,
Shawn
I want to be able to retire and do more than just survive. I think social security enables people to make it, but not live well.
What motivates me is the idea of freedom. I don’t want to “sit around and do nothing” all day; I just need to be able to set the terms. I want to be able to spend more time with my wife and family, and I want to be able to give to others who are in need.
I grew up not having much at all, so I am motivated to never go back to living like that.
I see a lot of homeless people around where I live. There is one guy that I pass each time I get to a certain intersection. I gave him 5 dollars one day. I saw him a couple weeks later with his sign asking for money and he was smoking! I was furious because I could only picture my 5 dollars going to a pack of Marlboros. Of course, there are probably plenty of homeless people that would definitely use it for food. I wish I knew who would buy a lunch with it versus who would just smoke or drink with it.
Two things were motivators..Being poor already and not wanting to ever go back to that place again. The second was an elderly tenant who would use his pilot light to heat a tin of beans throughout the day and then never turn the lights on because he couldn’t afford the electricity bill. Did I mention he kept his house freezing cold in the winter. It was a sad, miserable and lonely existence.
I’m glad my mom can crank the heat up in the winter and not have to worry about it.
Sandy – wow, that ‘s a sad story about that elderly man. Just reading that could motivate folks just a bit more.
I save because I was taught from a very young age to save my money and put it into my savings account. Plus I never want to be in the position of really needing something and not being able to afford it!
As a child, I was homeless several times. My parents were addicts. For me, money equals the security that I will always have money for food and a roof over my head. It is a huge motivator for me.
Thanks for sharing. I can see how that would bring the food and shelter aspect to the forefront.