Why do people insist that they can't save anything?

[cash330]

I noticed some discussion about spending money on wants out of savings. I think this could all be avoided and is why we should plan our savings. Instead of just saving just because and feeling bad when we take from our savings for summer camp, a vacation, etc. We should save for these things on purpose. I think that's the point of saving an emergency fund and keeping it separate from saving for a car, saving for camp, saving for retirement, saving for college, etc.

If we constantly reevaluate what we will want and need in the future and plan our savings accordingly, we don't have to feel guilty about it.

Just my 2 cents.

[disneysteve]

Originally Posted by Pitman

Personally, I don't see why there's such a big debate on how Vole feels about savings. He sounds no different that 85% of my friends who also feel saving their money would be a huge waste. At the end of the day, everyone is entitled to their own opinion, I know this site prides itself on being money savvy, but if someone wants to go against "our grain", they have every right.

While I agree that folks are free to do whatever they want to with their money, this site is called SavingADVICE, so when someone posts that they are doing something and lots of us disagree or don't think it is a wise financial move, we all are free to share our advice on a better way of doing things.

If someone feels that saving for the future is not a smart idea, I wonder why they would be hanging out at a site like this.

[Investing First Steps]

Just thought I'd weigh in on two things:

1.) I concur with Steve that I find the number of posts suggesting that people asking for, or giving advice on this board are out of line, when as far as I can tell, that's the purpose of the board.

2.) I think Vole's argument is a manifestation of a frustration probably every one of us feels. But at the same time is also dangerous hyperbole. While you may know many people who are currently being subsidized by your good decisions, I think painting them as being in some great position is over-statement. I strongly suspect if you could change places with them, you would not.

It's hard to watch people benefit from luck or bad short term planning, but ultimately good long term planning gets you to the end point you want. If someone spends all their savings on lottery tickets and winds up winning then I think "they made bad decisions and got lucky," not "man I should go buy some lottery tickets."

[disneysteve]

Originally Posted by Investing First Steps

It's hard to watch people benefit from luck or bad short term planning, but ultimately good long term planning gets you to the end point you want. If someone spends all their savings on lottery tickets and winds up winning then I think "they made bad decisions and got lucky," not "man I should go buy some lottery tickets."

That's a great analogy. Along the same lines, if I see that someone is living beyond their means and, as a result, is able to qualify for some aid that I can't get, I don't think, "Gee, I should live beyond my means so I can get aid, too." No, I think, "That person is really heading for trouble when their lifestyle catches up with them. I'm glad we aren't like that and handle our own finances a lot better."

[Investing First Steps]

I'd further argue that you haven't seen the end of all these moves yet so it might be hasty to draw conclusions. I've sat and watched the 90's stock boom, the dot com boom and the housing boom all go by thinking "those are bubbles I'm not going to touch them." Meanwhile people laughed at me and told me how they were "making" so much money while I was sitting on the sidelines. In the end all that money they "made" wasn't real and I was much more comfortable with my decisions.

I think it's easy to see parallels in the benefits of these bailouts. If the end result of government assistance is getting to pay several more years of interest on a house you can't afford and winding up taking a bath on it in the end anyway, I'm not sure you'll wind up being so envious of them. Usually good decisions have a way of catching up with you, just like bad ones.

[disneysteve]

Originally Posted by Investing First Steps

If the end result of government assistance is getting to pay several more years of interest on a house you can't afford and winding up taking a bath on it in the end anyway

I wonder the very same thing. Is bailing out a homeowner who bought a house he couldn't possibly afford really going to accomplish anything in the end or is it just postponing the inevitable? I guess the point is to keep the person in the house until the value recovers to a point where he can sell it without losing money. Who knows how long that will take, though? It could be years.

[Alex_Adviser]

Its because they don't care for their future. If someone cares for his/her future then he/she would definitely care to save. If you have a goal and would like to make it visible, then you would definitely be saving for it. But such people don't have any goals. They don't want to ahead ahead from where they are right now (current).

In my opinion, Savings equals to a reward to yourself.

[wincrasher]

It's hard not to formulate your opinions by what you see on the news every night. Often times it's not the whole truth.

Very, very few people are actually getting any help at all.

But everyone has the perception that millions are lined up to the trough gorging like pigs.

If you can get by and sort out your own problems by yourself, then bully for you - that's what we are all supposed to do. Everyone should prepare for bad times. But sometimes life knocks you down, despite your best efforts.

Don't begrudge the very few that can actually get what little help is out there.

[kilcher]

I once read that saving is like exercising. It's very hard to get started but the longer you do it the easier and more rewarding it is.

I think most people are in denial about what could happen to them.

[FrugalIII]

What all this has taught me is that nothing is a sure thing. I have worked my entire adult life (32+ years) in a profession that never faced layoffs of employees. That is until now. Now every day I worry if my job is secure. Had I experienced this feeling years ago, maybe I would have made different financial decisions. Being a saver by nature, I am in a pretty good position financially, but I took my career for granted. I assumed that I would have a job as long as I wanted to work. Now I worry. This is a giant wake-up call to me and should be to everyone. Tomorrow is not for certain!!

[ilr58]

I once read that saving is like exercising. It's very hard to get started but the longer you do it the easier and more rewarding it is.

Very true, it takes discipline to exercise (especially when you start to exercise and you don't really see any results right away) - just like it takes discipline to save money especially when the small amount you chalk away doesn't seem like a lot at first.

[bigijim]

A big challenge in saving for long term is that people think it takes a lot of money to save big money. How money works and personal finance isn't taught at a young age because most are raised by people who were never taught themselves.

My teenager has to save 10 percent of everything she earns from working. It has been that way for the past two years. That was never done for me. She now has the habit of saving ans watching her money actually grow. I had to learn the hard way many years after leaving home and bing on my own.

I showed my teenager before she started earning that if she would only save $200 a month in a decent aggressive mutual fund, that might average about 10 to 11 percent a year, in about 35 years she would have just over one and a quarter million dollars saved through the power of principal and interest compounding. So she will leave home one day not only with the knowledge of time vs money but also with savings already started. I don't see her having to work past age 35 if she does not want to. She realizes that time is more valuable than money. You can always replace money, you can never replace time.

She was taught to pay first and play later rather than the reverse. She is taught not to buy into the advertising that tells here that she has to have certain possessions to have value as a person. It has to start at home. Parents have to make a decision to learn the fundamentals of personal finance and how money works in order to teach it to their young ones and instill good habits for successful living. That is why I started my web site after leaving the financial services business.

But I am pretty much preaching to the choir if you're reading this on this forum. It is really a vicious cycle that repeats generation after generation. Someone in the family tree has to wake up and take a look around to realize that the way people have been operating int he past isn't a desirable future. Then it is just a matter of seeking out knowledge which is actually plentiful once you get a clue of what questions to ask.

It takes a wake up call. I like to teach one how to do and then they can go out and teach another. if two taught two each month for a year you have 4096 people with the knowledge. The only people who would be against this are the advertisers and the merchants they serve and the employers who hire the indentured servants.

[CoreAssets]

You would have to say that the discipline is not there. Once they see the value of it, perceptions might change.

[swaymonae]

I understand both sides. It's not that they can't save, it's that they don't think they can,.. and what makes it worse is accessability. When someone tries to save, and they're out at the mall and find something they like, their checking account may be empty.. but there's always savings just an ATM away. It's too easy to access.

I've had a hard time saving until dundundundunnnnn: ONLINE SAVINGS! Ever since then, I've set up reoccuring transfers.. originally, I actually started out with $10 a week. It didn't make a huge difference in my level of comfort, but it added up qucikly. I started making the amount larger as I became more comfortable, and my weekly contributions of only about 6 months now total a few grand.

I think it's just demotivating when you'd tried and tried again to save, but it's too easy to acquire. With online savings, a transfer takes a couple days to get back into your checking.. by that time, hopefully you've talked some sense into yourself and transfer it back.

[swaymonae]

Originally Posted by vole

There's another side that no one has addressed:

It's better not to have savings.

I saved and had to pay full cost for summer camps for my two kids.

I saved all my life and then had to pay full tuition for both my kids.

I saved and now face the possibility of having to use my savings for medical care.

Others who earned as much as I did, but didn't save, got financial help for all these expenses.

How about all those people who bought houses they couldn't afford and made profits as real estate values went up.

And now that the party is over, there are efforts to refinance for those who can't pay their mortgage. Reward those who didn't save and overspent.

And what happened to my savings? Almost 1/2 wiped out as a result of fraud, abuses, and criminal activity of banks, corporations, insurance companies, and investment houses.

Our society rewards those who don't save and penalizes those who do adn who try to live within their means.

Color me bitter.

I understand the frustration to a point. The point where you cleared out your savings for summer camp? Really? If you hit the dollar store, you can buy some balloons and crayons, collect sticks in the parking lot, maybe pick up a ball of yarn and a book on tying knots. Summer=fulfilled.

Just joking ofcourse.

Honestly, I can easily find myself complaining about people who are irresponsible with their money getting assistance that they really don't deserve.. but I'm not going to complain that I can't send my kids to private school or summer camp and if it's going to clear out my savings? Well, I'm not going to do it.

Plus, if anything, you're teaching those kids to have everything handed to them. They may grow up to be the very people you complain about.

Tell them to get a job. Summer=fulfilled.