Saving vs. Spending

Did you eagerly save every coin and dollar given to you as a child to purchase that one thing you just couldn't live without? Or did you immediately spend whatever you got on whatever you could get before you even got it into your pocket, much less a piggy bank or savings account? While you can't change how you've handled money in the past and what you experienced growing up, you can examine your actions and attitudes toward money.

Here it comes, you say--it's the old "a penny saved is a penny earned" speech or "save for a rainy day" or some such expression. Well actually, we would like to say right now: It's no better to be in the miserly category denying yourself anything that enhances your life in the present in order to invest for the future than it is to squander every penny.

Tip Setting aside money that won't dramatically impact the pleasure level of your present lifestyle is the best way to stick to a savings plan. Any savings plan that is overly onerous and doesn't allow for any pleasure activities won't be kept up by anyone except those who have always saved no matter what.

For one thing, an unrealistic plan that doesn't fit your lifestyle will be near impossible to keep up for long. On the other hand, the word "budget" doesn't have to conjure up unpleasant thoughts of counting every single penny you spend.

Financial Calculators Reducing your spending can be worth more than you might think. Use this Benefit of Spending Less Calculator to help you see just how much your budget reductions may be worth if you were to invest them. View the value of this new potential nest egg both with and without taxes factored in.

Chances are good that the vast majority of people will never go to extremes when it comes to saving and spending. However, most of us don't fall anywhere near the middle either. If you're like many Americans, you're spending a lot more than what you're saving. During the booming economic times of the late 1990s and early 2000s, Americans were saving less and less each year. With the economic downturn that began in the late 2000s, savings rates increased because consumer confidence was low and many chose the security of saving over the instant gratification of spending on nonessentials.

Assuming you fall into the large group that never gets around to saving, read on for the common reasons many people give for spending everything they make. You may be surprised at what not thinking concretely about saving is actually costing you with regard to what you really want from life.