Why do you save?
It’s a simple question, but I think we would get very different answers if we sampled a large group of people. Some people think in terms of needs, some in terms of wants. Some are risk-takers, others are risk-averse. Plus, we each have our own life experiences and circumstances that shape how we view money and why (or why not) we choose to save.
This question came to mind as I got in a conversation with someone who enjoys traveling and likes to visit far flung places across the globe. Now, I have had this interest in the past, and would like to do so again in the future. However, with kids and other more important financial responsibilities, this won’t be a part of my regular lifestyle for quite some time. After all, there are other things to focus on!
But this person talked about saving for the next trip. As in, having the primary purpose for saving money in general being very specific to the interest in doing more traveling. Not for any other important aspect of life, but for globetrotting.
This got me thinking about the different reasons people might save money. I think we can divide these into two groups: Aspirational, and Fear-based.
Aspirational Reasons to Save
Here, the reasons for saving can be for fun things that bring personal happiness and satisfaction, or in some cases personal development. For example:
- A “dream home”
- Luxury car
- Traveling the world
- Early retirement
These aren’t based in worrying about anything. Rather, these are based on the idea that life is short so why not enjoy what we desire and not waste time thinking about the downside. Again, I’m talking about looking at these as the primary reason to save.
Fear-Based Reasons to Save
In this category, the reasons to save are more along the lines of worrying about not being able to take care of an important part of life. For example:
- Retirement when unable to work
- Health care issues
- Elder-care or other family issues
- “Just in case” an unforeseen issue arises
I’d characterize this mindset as more conservative in nature when it comes to money, though some (including someone I discussed this topic with) might consider it to be a “scared” approach to money.
My Primary Reason to Save Money
Again, the question here is: what is your primary reason to save money. In other words, what ranks highest among all the reasons to save, and what really motivates you to do so more than any of the other competing reasons.
For me, the primary reason to save, as I’ve thought about it, is to make sure that I don’t end up short of money when I’m older and unable to work. That visualization can really keep me going!
It’s not a dream of living in luxury, or having material things – though those would be nice outcomes and do enter my mind as secondary reasons! However, while those types of thoughts can also be motivating, I think more in terms of making sure my needs are met in the future. The last thing I want is a financial disaster when older and much less able to generate non-passive income. So, I’d say I have more of a fear-based approach to saving money.
What about you?
I’m curious to hear about what your primary purpose to save money is.
Of all the reasons you might save money, what is your #1 motivator?
I think since I first opened a passbook savings account at my community Savings & Loan and learned about that wonder called ‘interest,’ my primary reason for saving money hasn’t changed: to generate enough passive income to pay my (modest) living expenses so I can reclaim all of my time as my own. Still working on the project… 🙂
I’m saving for my future, hopefully to retire sooner than later. I agreed to covering myself when I’m older and unable to work or to security a wage like I could when I’m younger. I think you could also classify saving into short term 5-10 years for those things like cars, vacations, home and long term 25-40 years for the FI or retirement.
I’ve always saved for something….a new purse, a new cover for our bed, etc. But my primary reason for saving is for security. As much as having something nice and new is, nothing is more satisfying to me that to watch the balance increase and knowing that pile of cash is there when I need it.
Admittedly, I’ve been more of a fear-based saver. While I love the work I do and I love being useful and productive — and therefore can’t imagine not doing ANYTHING that earns me some sort of income — I’m highly motivated to save because I’m afraid that for whatever reason I won’t be able to work when I want to. I’ve been working on changing this mindset, though!
This is what’s “personal” about personal finance. I wrote a post about my reasons for saving last year, and unfortunately they are fear-based. Both my wife and I suffer from chronic health issues and it eats an enormous hole in our budget. Of course there are more positive reasons that are further down on the list but that has to be our number one motivator in order to balance our budget.