Bad Reasons for Not Saving
Posted by Gail | Filed under Saving
People who don’t save have “great” reasons for not doing so. (Now replace “great” with “dumb!”) Here are some of my favorites:
I don’t have anything left to save. Waiting to see how much money is left at the end of the month is a sure way to never have anything to save. People can blow through money faster than a hot knife through butter. You’ve seen me peek into people’s refrigerators. Inevitably when there’s no food in the house, the spending analysis shows gobs of money spent in restaurants and for take-out. If you want to have some money to save, make a menu for the week, shop with a grocery list, stock your fridge with fresh food, and use your freezer to save time on busy nights or for when you’re just too tired to cook.
I’m paying off debt. Yes, walking around with a bunch of debt means mortgaging your future income. But you can’t sacrifice your future for past mistakes. If you can’t find a way to get your debt paid off and save money for the future, you’re not trying hard enough. Whether you get a second job, a third job or a better job, you have to find a way to make more money so you can get rid of the debt AND save.
I have to look good. This is one of my all-time faves; people will spend all kinds of money to look good even as their financial foundations rot. If you’re paying a premium to flaunt a famous name and you’re not saving for the future you’re a fool. If you’re defining yourself by the brands that some starlette who makes 100 times what you make wears then you’re a pathetic fool. Dontcha know that many designer items are made in the same factories as less expensive goods? Expensive brands are no substitute for a solid financial future.
I can’t stop shopping (said in a soulful and pathetic voice.) Really, you have no self-control and you’re using that as your excuse. The easiest way to not spend – and therefore to have money to save — is to stay out of stores. If you’re shopping for entertainment find something else to do. Never go into a store without a list. And pay cash or have the cash ready to pay off the credit card if you’re disciplined enough to use them as a tool and not as a financial bridge.
Cars, insurance and gas are expensive. Canadians routinely overspend on their vehicles. If you’re using more than 15% of your net income to get you from here to there, you’re spending too much. I’ve always considered a car a means of transportation, not a reflection of my identity or success. I scratch my head at young people starting out who think they should be driving a $50,000 or $60,0000 luxury vehicle. Even if you buy one second hand, they are more expensive to maintain and insure. I guess the big question is this: Is it more important to look rich or be rich?
I’m too (pick one) — young, old, rich, poor, or busy – to save. Everyone thinks their situation is special and their challenges unique. But we’re more alike than we want to admit. And everyone needs to set something aside for when they’re old and gray. It’s never too late to get started. And it’s never too soon. If you haven’t set a penny aside, making just a small commitment today can make a huge difference to your financial future. So it doesn’t matter how little you have to start, the important thing is to start.
October 15, 2012 at 7:43 am
I was so fortunate that my grandfather gave me a copy of the ‘Wealthy Barber’ (first edition) when I was 15. I did not understand the whole concept at that young age, but I knew saving was a priority and he helped get me started.
I can’t believe the foolish financial decisions my friends make; sacrificing their future and security for a designer purse or luxury car.
Even if you start with $20 a pay as a young person, your savings will add up and you will develop the saving bug early in life.
October 15, 2012 at 8:13 am
Being rich is of course much better than looking rich, but society puts so much emphasis on looking the part that people will mortgage their house and rack up their credit cards to look like thy have money, when they don’t have two dimes to rub together. It’s very very sad.
October 15, 2012 at 8:32 am
I’ve convinced myself that if I don’t have money in the bank, I’m not safe. I still have debt to pay down, which I do, but the sense of balance is very worthwhile.
October 15, 2012 at 8:45 am
I think what happens sometimes is that people become overwhelmed when some of the financial gurus suggest how much they need to save so they just give up and live for today. I find Gail’s suggestions of even a small amount every week or month is more attainable for most. I also firmly believe that struggling with not having money can almost become an identity (intentionally or unintentionally) so that others feel sorry for you and pay the tab or give you things and you remain a victim.
October 15, 2012 at 8:48 am
I wish I had seen the light a lot earlier in my life, so I’m doing everything I can to instill a sense of money management into my two sons. Sometimes I feel like I’m talking to a wall, but I keep on talking!
October 15, 2012 at 8:55 am
Thank you for this Gail. I now have a new mantra “Is it more important to look rich or be rich?” Of course I will always answer “be rich”. I’ve been following along with the blog, your books, and your TV shows but this year have finally made the right moves to paying off my debt. I got a second job and after three months of making huge progress they started to reduce my hours. I’m now looking to get a third job as I’m too determined this time not to make it happen. I could pay off my debt in three years with my current income but I don’t want to wait that long. I want it gone by next spring and I’m trying to do everything in my power to make that happen. Admittedly I still eat a little too much take out but am going to start monitoring that much more starting today.
Thanks again Gail.
October 15, 2012 at 9:43 am
My family – especially my grandmother – did their best to instill in me the importance of saving. I didn’t start until I was 18 with an RRSP. That being said even though I was saving a little bit I was spending a LOT more. Sometimes we have to learn lessons first hand. I’ve paid off ALL my debt which to me was huge (near 10 grand) between Credit and Family loans all the while saving in RRSP and a savings account. It feels so great to be debt free (hopefully the only future huge debt I’ll incur is a mortgage).
I find debt/saving a lot like weight loss… doesn’t happen until you start doing it and it doesnt stay off unless you find the path that works for YOU.
October 15, 2012 at 9:49 am
I think it’s important to teach the art of saving to kids at an early age. That way it won’t be such a struggle that most people deal with on a daily basis in their adult life.
The only problem… a majority of parents cannot teach what they do not know. I received an email from a gentleman who was 45 years old asking me to teach him how to save and budget his money. The sad part is I was 30!
October 15, 2012 at 10:00 am
“I have to look good” and “I can’t stop shopping”. These phrases sound like engrained neurosis. Our relationship with money is neurotic, and until we get a grip of this, things will never change for the better, financially AND psychologically. LOVE it Gail!
October 15, 2012 at 10:24 am
I know society puts a lot of pressure on people to act a certain way, wear certain brands, own certain items…but if you don’t hang out with those folks, a good chunk of that pressure disappears!
October 15, 2012 at 10:30 am
Dawn – you are absolutely correct. If you don’t hang out with the people who think designer fashions are important, it will not be a priority in yours. My niece has been raised in a family and area where designer is normal and important. However she will never have an income like her parents to keep that fantasy up. What a shock it will be when they pull the purse strings.
October 15, 2012 at 12:24 pm
It bothers me that the same TV channel (Slice) that brings us Gail is also running “My Shopping Addiction” and “Collection Intervention” and “Real Housewives”. So many of these shows glorify this stupid excess.
I feel sorry for Gail trying to change one Princess at a time, and she does such a good job. Problem is, these parents and boyfriends and husbands create the monster behaviour that they complain about later. Most of these girls couldn’t do ANYTHING on their own without their enablers and their credit cards.
There’s where the change needs to start. Keep up the great work, Gail.
October 15, 2012 at 1:53 pm
As many of the “Guru’s” say: Save automatically because it works.
If you think of your savings as a billl payment/payday obligation, you won’t miss it. As much as I would like to have more take-home pay and reduce my debt, I feel good knowing I am building my retirement savings, emergency fund and my son’s RESP. The debt might reduce a bit slower, but I’m okay with that.
As Gail said, there is always a way to find room to save. I cut off my cable, the channels I still receive suit me fine. I bought a few cable to connect my laptop to the TV so DH will still be able to enjoy the re-runs he likes. Everyone is happy and we have more money for other obligations.
October 15, 2012 at 2:11 pm
To Karen M’s point, it is about changing one Princess at a time, even when the tides are against you. Our society today promotes irresponsible personal spending (and bad behaviour, in general: eg. those so-called “reality” shows which has no resemblance to reality) by using fear, mixed personal image and self-esteem messages to do so. When we are bombarded by these toxic messages, all the more reason to take personal responsibility of our present and future by NOT playing the victim.
October 15, 2012 at 2:24 pm
I think number one and two depend on the person. I know at least 3 people that do number one and are doing just fine because they are by nature very frugal people so there always IS money left over at the end of the month. I did it for quite a while myself and while I didn’t save as much in those years I did save.
When I graduated I was a total number 2. I had to buy a truck for work and I lived off one paycheck a month and put the other towards the truck and my student loan. 10 months later I was debt free, out of work, with $1,100 in the bank to last me for 2 months until my next contract started. It was a bit hairy that summer but I don’t regret it in the least.
Mind you my complete hatred of debt has a lot to do with that. Every time I got my loan statement I would look at the interest portion and think of all the things I could do with that money. Downpayment fund, dinner out, a play, dog food, phone bill.
October 15, 2012 at 3:21 pm
Too busy to save? Bizarre. I find that when I’m busy, I don’t have time to spend money because I never make it to the store (even when I need something. Currently I have to find time in my schedule to go shopping for my little guy’s winter boots-a definite need in the Great White North!) Plus, it doesn’t take any time at all to save. I have auto debits from my account to my RRSP, son’s RESP and emergency fund. I don’t have to think about it. It would take more time to undo it in fact!
That said, if people don’t want to save (or exercise, or read, or study), they will find any excuse in the book.
October 15, 2012 at 3:51 pm
It has been a very expensive summer – I had to leave home to take care of my elderly father 800 km away for almost 3 months after he had a major injury, which precipitated a decline in his overall health. I haven’t worked for 14 weeks and it hurts. I had to use up savings to pay for travel to and from his home until we got him stabilized and moved into a care facility. So I have used a huge amount of our savings.
My hubby is a school teacher, and we save from September to June for all the annual expenses, vacation, insurance, taxes, and emergencies – all gone this year before plan, however, as of October 15 the automatic transfers to the savings accounts have started again. We agreed that the entire family doesn’t need more ’stuff’ for Christmas, and we are eating on a budget, no eating out, until we get the accounts refilled. I just went back to my part-time job and we will get ourselves back on track.
Thank heavens we had our emergency funds and savings. We had to strip them down considerably, but didn’t have to dip into credit to cover the costs we incurred. I hated using up those emergency funds, but am I glad I had them!
No time to save – bull crap!
October 15, 2012 at 4:53 pm
Love this post! My poor university student teenager has a small amount of his monthly part time earnings going into an RRSP. At first I thought it was kind of cute, but now I think it’s great as it gets him in the habit of saving money that he could well be using for something else. There are always things that you are going to need money for (or think that you need money for.) If you aren’t disciplined to save, it just doesn’t happen. The younger you can start to establish good habits the better.
My partner can’t understand the idea of saving. He would like to rely on the HELOC to pay for everything big, which makes me a little crazy. I had to really change my thinking to designate money from every pay cheque for long and short term savings goals and unforeseen emergencies. I wish I had figured this out 30 years ago! I’m trying to teach my kids the lessons I learned the hard way, without being too preachy. I got a neat little calculator from my bank (ironic, I know) that gives the annual cost of those little purchases that we fritter way money on every day or weekly, like coffee, gum, snacks, fast food, lottery tickets, etc. Very enlightening for my teens to realize how much cash goes out the window during a year for a little habit.
October 15, 2012 at 5:38 pm
@Karen M – I could not agree more. Slice has both ends of the evolutionary scale so to speak. On the one hand, you have Gail who is trying to do something positive and encourage real people to get their financial house in order and plan for the future. On the other hand you have those brain-dead bimbo housewives whose only goal in life is to outdress/outbrand/outdo their ‘friends’
The sad thing is, many people who watch these shows think this is the way people live and that if they don’t have brand name everything, their life is somehow diminished. They sacrifice their future for a short term high.
My sister-in-law bought a pair of Gucci slippers for $350 for a 3 month old. Honestly. I don’t care if you are Warren Buffet; paying $350 for a pair of children’s slippers is moronic. I would have taken that and put it in an RESP. She is bankrupting my brother who use to have a healthy financial portfolio. She looks down on me (I outfit my kids in hand-me downs and Joe sale items) but I just roll my eyes and ask how she plans to pay for their university. She says my brother will take care of that. I ask her with what – she has already spent them into near bankrupcy.
October 15, 2012 at 6:22 pm
@Debby – Make sure your teenager knows that he doesn’t have to claim the RRSP contribution in the year that he makes it. He can wait until his income is higher (and therefore the percentage of income tax he pays is higher) and then make the claim then. He still makes the contribution and gets the benefit of savings now, and the tax break comes when he will benefit more from it.
October 15, 2012 at 10:48 pm
I don’t know where I heard this, but it’s something that definitely helped. PAY YOURSELF FIRST. Pay goes in, savings get moved into a SAVINGS account. RRSP contributions come out automatically. Guess what, we don’t miss that money. I have three savings accounts as well as RRSP’s. One is the first kids account (pays for activities, dental and health, other large child related items). Two is my emergency account. Three is my “daily savings” which gets the money for car repairs, vacations, etc. The money gets moved each pay (it’s a set amount) and I don’t notice it, until my daughter needed glasses etc.
October 16, 2012 at 9:10 am
The types of excuses here as someone noted already are very similar to the excuses used by people who don’t exercise. It’s amazing how easy it is to find an hour a day to exercise, when you really go looking for it.
One thing for those bagging on those shows promoting consumerism, etc – personally I find nothing wrong with buying expensive clothing, etc as long as you can afford it without being a drain on society. And that I think really is what emergency savings, retirement savings, education savings are – tools designed to empower people to survive the little changes in life themselves.
October 16, 2012 at 9:32 am
If you look up and down my block you will see lots of luxury vehicles, ppl going on vacays all.the.time, toys pouring out their garages, etc but when time came for them to start fixing their properties after the flood last year no one had a penny to start and all had to wait for insurance money. We were able to replace everything we needed to to move back home within 2 weeks (and before insurance paid us but after they documented the damage…never start work until they check the damage ) while it took some ppl months…even a yr to get back. We Look like the poorest ppl on our block with our new to us car, small-ish condo (enough room for us but 1/2-1/3 the size of other homes), hand me down clothing for the kids, walmart book bags (yes some parents have spent 60-100 ob book bags that get thrown on the floor and stepped on by 5-6 yr olds) but we are the only ones who can afford to give our kids allowances
October 17, 2012 at 7:57 pm
What a timely article, with revised debt statistics now coming out saying that our debt to income ratio is now hovering around 161%. Thanks so much, these are all reasons I hear as a mortgage broker all the time, and I always make sure to emphasize how important it is, and try to show my clients ways they can pay off their debt faster and hopefully, at lower interest. Thanks again for the post!
October 18, 2012 at 10:43 am
[...] you can handle the truth from Gail click HERE and see her tell you how it is on each point. Gail does not hold back! Share [...]
October 19, 2012 at 1:03 pm
[...] a big fan of Gail Vaz-Oxlade (Till Debt Do Us Part) and she had a great post about the “Bad Reasons for Not Saving.” I hear these reasons all the time, unfortunately, and it boils down to your priorities. [...]