Why saving money is making you poor (4 minute read)

 

Do me a favor. Type in “How to Save Money” in Google and tell me what you get.

 

Over 200 million results of tips and tricks on how to save money. Just as expected, right? Don’t eat out, wash your clothes using cold water, don’t buy Starbucks coffee (or any coffee while you’re out), clip coupons…

 

*Yawn* – it’s all the same stuff. 

 

 

While some of these ideas are pretty innovative and interesting (and I do use some of these tips in my own life)…they really just help me find ways to solidify limiting beliefs that money is scarce and needs to be saved. When, in reality, there’s tons of money out there for everyone.

 

 

The idea of saving money is thought of as a noble endeavour. Make money, save it, don’t spend too much of it, and retire rich. Or at least well off, right?

 

I used to think this way my entire life. Until something changed. I realized that I was playing into my fears. The more money I hoarded, the more afraid I became (of losing money).

 

I used to hoard money away because I was afraid that if I didn’t, I would lose it or I wouldn’t have enough of it for a rainy day. While it’s good to have cash reserves, your money isn’t really doing anything for you sitting in an account that doesn’t put it to work. Lazy money is no good to anyone.

 

I used to hoard money in my savings account, hiding it away from the world. Like Gollum and his precious. How many of us are like this? Hoarding our money…afraid to put it to work for fear of losing it?

 

(Can’t you sell some of those shoes on eBay or something?)

 

The definition of hoarding is to amass and hide or store away.

 

The definition of saving is to keep and store up.

 

Very similar. If not the exact same. I use these words interchangeably.

 

Now, I’m not saying that you should blow all of your money or NEVER save any of it. Frivolous spending and quick, emotional purchases are just as bad. What I’m saying is, you should focus on making more money and investing it, rather than always saving, saving, saving and holding it hostage in your bank account.

 

Just as Robert Kiyosaki explains in his savers are losers article, the banks pay you a lower interest rate than the inflation rate. So your money just rots away in your bank account. You actually LOSE money when you save it in your traditional bank account for a long period of time. 

 

If you focus on saving, you will undoubtedly find new ways to save (there are millions of ways to save). You’ll clip coupons, penny pinch, buy less coffee at the coffee shop, wear leaf sandals like cave people, follow the “if it’s yellow, let it mellow” theory, feed your dog corned beef instead of dog food, wear clothes that say “class of ’89” on it, and the list goes on. But is any of this actually helping you in the long run? Or are you playing into your fears of not having enough?

 

Let me tell you something, you’ll never be satisfied if you focus your time and energy on saving. You’ll keep hoarding and hoarding and never be fully content. Why not work on ways to increase your salary, or build up new income streams?

 

The more you focus on saving, the less energy and time you have to spend on making (and subsequently giving) more money. The more you focus on not spending so you can save, the less you focus on making more so you can have more to do things with.

 

Too much of anything isn’t good for you (try eating 50 apples a day and tell me if that still keeps the doctor away). If all the time that people spent on saving money was instead spent on making money and investing it properly, we’d have a whole lot more money makers out there.

 

So do me a favor and stop saving all your money…instead, strategically put your money into places that will help it grow (real estate, stocks – that pay dividends (hopefully), your business, yourself…).

 

Have allotments for your money in your bank account (eg. savings 10%, investing 20%, fun 5 % etc), make it work for you and have fun with it. But the last thing you want to do is hoard it all away like a nervous chipmunk that spends 16 hours a day foraging for that next penny saved.

 

A wise person once told me – what you focus on expands.

 

Simple, yet effective.

 

So, with that being said, would you rather focus on finding new ways to save money, or finding new ways to make and invest money?

 

Saving money by cutting costs and other money saving methods may be necessary for a small sliver of time in your journey to increased wealth, but if it turns into your permanent lifestyle and mindset, something needs to change. Because these practices will hold you hostage to a life of mediocrity if practiced daily and for long periods of time.

 

4 minutes is up. I hope you enjoyed the read!