Reclaiming the Word “Savings”

What Happened to the Word “Savings”

Savings is a commitment, not an amount.The Bureau of Economic Analysis released its monthly report on our consumer habits as a nation, showing that we are saving a bit more on average per household over the same time last year. Before we get too excited, though, that still works out to be less than $200 per household per month in this country. And that’s the average! The median monthly savings – thanks to 60% of our population living paycheck-to-paycheck or worse – is actually $0!!! Let me repeat that:

The median household monthly savings in this country is $0!

And it’s only close to $200 because of the 40% of Americans who have committed to saving something, anything on a regular basis.

So, as I surfed through postings on other blogs and on personal finance pages of major media outlets this morning trying to find tips and ideas for increasing our savings in this country, I quickly got frustrated. Try yourself surfing for the phrase, “savings tips,” and you’ll see what I mean. Page after page will tout new and better ideas for saving money, but they will actually be publishing article after article about how to spend money.

Apparently, spending is the new saving!

Of course, these sites would shoot back that these are not articles about spending but about saving money.

“Oh yeah, how are they about saving money?”

By spending less money, you’re saving money.

I’m sorry, but spending less on consumer goods is not saving money. It’s still spending. Call it a sale, call it a discount, but just don’t call it, “saving money.” Saving money is exactly what the wizards of Madison Avenue (the American consumer marketing machine) want us to call (and believe) it.

Savings is a CommitmentWhy does it matter? The phrase, “to save money,” should refer to the process of putting money away for future use (short- or long-term), whether in a savings account or, though less technically correct, in an investment vehicle such as a 401(k) or an Individual Retirement Account. Intellectually, we all know it’s important to save for a rainy day and to invest for our future. The fact that only 40% of us do so means something derails that message on its way from our brains to our pockets and wallets.

Somewhere along the way, that message runs headlong into sales pitches claiming that if we buy more, we’re save more! Or that we can save 50% on select purchases. Or we can save on everyday prices by shopping more regularly.

The reality is that no one ever comes home from a sales shopping trip with more money in their savings account than when they left. We’ll never save money by spending less UNLESS we actually put money away into a savings account of some sort.

So, the next time you hear an add claiming to “save” you money, call their bluff. Ask them how much money they’ll put into your savings account when you purchase something from them. If they can’t answer or if they say something deflective like, “That’s up to you,” ask them to change their verbal approach from “saving money” to a phrase with terms such as “sale” or “discount” or “affordabilit” or the likewise.

  • Let’s reclaim the rightful financial meaning of the word, “Savings!”
  • Let’s accept that using a word in a new and different context will actually change the meaning of that word, and that, with a new meaning, the word can change our attitudes and beliefs which, in turn, can change our behaviors!
  • Let’s save money for our own benefit, and not “save” money at the store for the benefit of the CEO or of the marketing director!
  • So even if it’s $5 a month, or $2 a week, let’s save money at our bank or credit union in a savings account!

When our refrigerator dies, or our car needs repairs, or the gift giving bills come due, we’ll never thank our lucky stars that we spent less at a sale last month. However, we will definitely be grateful for money in our savings account ready to get to work for us doing what we need it to do: saving us in times of financial trouble!

Thanks for stopping by today. Please share this article with friends and family in your network.

Todd Christensen-Author of Everyday Money for Everyday People, Todd ChristensenTodd Christensen
Everyday Money for Everyday People

*Many financial advisers suggest never paying off your mortgage since interest rates are typically much lower than the return you’re likely to earn on securities investments. Unfortunately, as too many learned during the housing downturn of the Great Recession, owing more on your home that what it’s worth takes away many importance choices the homeowner might want to make. For example, if you owe more than what your home is worth, moving away to take another job is often out of the question.

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