A common question I receive from family and friends is “why bother to save money?” Their reasoning is that, if they can afford it, they should enjoy every penny they have to spend.
There’s nothing wrong with this logic on the surface. We’ve been trained to believe that we no longer really need to save for retirement or for protection in the event we become seriously ill or injured. Social Security was created to take care of us in those cases.
The truth is far different. Social Security was designed to replace only half of our earnings. My $600 a month employment income translates into roughly a $300 Social Security retirement benefit. While programs like SSI are in place to raise your monthly income to a more livable wage, in order to qualify you can’t have much at all in assets like money in the bank. For instance, a family member was recently informed that she had X amount of time to spend down the $5,000 she had managed to save before she would lose her benefits. She had been so proud of her savings! She had scrimped and saved in order to afford a down payment on a house but the government didn’t care. She was forced to give up her dream of home ownership and bought a car with the money since she couldn’t qualify for a mortgage with such a low down payment in her area.
If you are injured it can take years for you to qualify for Social Security Disability benefits if you qualify at all. The odds of being able to survive financially during this time are slim without extensive support from friends and family.
This is the reality that we live in. The safety nets we have been taught to believe in are not as safe as we believe them to be. As a result, we need to save money not only to survive while we recover from an injury but to supplement the limited retirement benefit that Social Security provides.
It is not always fun to scrimp and save when everyone around us spends money like mad. It’s not fun to turn down invitations to spend time with friends or catch their condescending looks when they show off the things that you know you can’t afford.
It’s not fun being poor, period. If your assets and finances are so low that you qualify for public assistance people judge you for every move that you make. I cannot count how many times I’ve heard someone behind a person on food benefits remark negatively about the fact that a mother purchased snacks for her kids or bought some microwave meals to eat at work, and I’ll never forget the time a worker at a dental office commented on my daughter’s brand-new shoes.
They were the first pair of brand new shoes my daughter had owned in years.
I’ve lived an extremely frugal life for over 20 years. I deliberately worked lower-paying jobs and saved my money so that I could take periods of time off and savor the fleeting childhood of my children or be home for them when they got off the bus after school. While I have no regrets, I didn’t always enjoy the experience.
So why save money?
You need to have money to live on in the event you get hurt. You need to have money if your roof springs a leak or your car needs repaired. You definitely need to have money saved up when it comes time to retire unless you want your income sliced in half.
Most importantly, you need to save money if you want to have any hope of escaping poverty. There are a number of ways to invest your savings that will help you climb the financial ladder but that option is completely closed to you if you don’t have any money to invest. While you may have to hit the books in order to learn how, it is possible to escape poverty by learning how to invest in precious metals, the stock market, opening a small business, or other areas. You might not get rich but you’ll end up making a lot more than you would by leaving the money in savings at current interest rates. Ask Chris Gardner if you don’t believe me. He was homeless when he started out.
If you want to survive in this world you need to save. If you want to improve your lot in this world, you need to save. If you want to have any hope for a better future, you definitely need to start saving.
If you are new to saving money, check out my book The Shoestring Girl. I’m one of the few frugality experts who actually knows what they’re talking about when it comes to saving money