Most of us have been told as early as our pre-teen years that saving money is a necessary part of life. But, if you didn’t get that talk as a kid, or even if you were some hypothetical alien observing our planet, you would hardly see a trace of formal or even just consistent education about and implementation of savings (let alone adequate savings). So why is it that we as a human race absolutely suck at saving? Well, I don’t think there is an easy one sentence answer. But, saving has an enormously personal stigma attached to it, whether that came from your parents, your siblings, your neighbors, your fellow countrymen, your elected government representatives, or even the wildly growing general public. The problem here is that no matter whether we’re doing it right or wrong, going against the grain makes you stand out, and society generally tells us that’s a very bad thing.
But on top of stigmas, society has taught us plenty of lessons that essentially advocate for anything but saving your hard earned dollars. Because hey, when you get old, your government will give you money so you don’t have to work. Haha! By the way, I’m sorry if you still believe that. If you do, you may want to consider just how dangerous that assumption really is! But back to savings, consider for example the recent stories coming out about the teens and young adults going into extreme levels of debt just to try to get famous on Instagram. No one went out and explicitly told them to spend money they don’t have to get famous, but that’s what they see from their perspective. They see perfectly framed, cropped, filtered, and edited pictures depicting these immaculate and apparently desirable lives of luxury. What they don’t see is that same “millionaire” girl or guy actually working a regular job, buying cheap clothes for the work week, eating leftovers for a few days, dealing with a crappy landlord, a noisy neighbor, or just trying to keep up with the payments on all their maxed out credit cards before flopping on their bed, exhausted from keeping up with this virtual persona. So what’s my message? Don’t fall for it! Everyone starts out with 24 hours in their day, the clothes on their back, and their reasons to get up in the morning. Life isn’t just about those perfect Instagram pictures. Sure, some of them might look pretty cool, but it’s so much more than that. The good and bad, the beautiful and the ugly, the stressful days and the relaxing ones, it all blends together to form a real life. The people gloating over their “perfect Instagram profile” are no exception to this. They have shitty days just like you and I. Of course, I’m probably preaching to the choir over here, but you get the point.
So, what about saving? Sure most of us suck at it, but what should we do? Well, first off, just remember not everyone is in your shoes. Meaning, there are people you can learn from, but more importantly there are people you can teach! But you’re probably thinking, “why should I be teaching someone how to save if I can’t even pay off my credit card this year”? And to a degree, you’re right. But, to fix this endemic financial problem, there needs to be a multi-pronged approach.
First, we need to realize that we expect too much from our governments and other social structures. Especially considering how little we are willing to put in. Consider for example, as of writing this post, the United States has nearly $21 trillion dollars of national debt. If that doesn’t sink in, this is how that really looks…$21,000,000,000,000.00! Another translation, it would require the net worth of 164 Jeff Bezos’ (founder of Amazon) to clear that debt. Yet another way to look at that is every living, breathing human in the United States would have to pay over $63,000. That includes your 2 year old kid, and your retired grandparents. Or, that is enough to fund my lifestyle for many many hundreds of millions of years! So clearly, the government has their own issues to deal with, it’s foolish to think that they are even remotely capable of providing services for all of us without dooming us all to an unimaginable economic collapse. As a consequence of this over-dependence forming over many generations, we have gotten so relaxed on individual savings responsibilities. Just take a look at the average retiree’s bank accounts right now and see what I mean. It’s not a pretty sight for an overwhelming number of them. And it’s not like this is a new surprise. It has been that way for a long long time!
- Second, we need to realize that 99.999% of us are sitting sub-par on the savings spectrum. But, that doesn’t mean we haven’t had valuable life experiences we’ve learned from. Kids these days need to know about our failures and shortcomings just as much as our success stories. The real ones experienced by you and I, not just that one famous blogger or big time CEO who dropped out of college. Compared to anyone with even just a bit of real life experience, kids have a much harder time distinguishing what’s typical from what’s a rare exception when it comes to financial success stories. Those of us who have life experience should be trying to differentiate between the two for the younger generations. They/we don’t need perfect leaders or role models, they/we need sincere people with real experience who can make a positive impression, no matter the size. In this instance, there is a necessary balance between quality and quantity. We will never have quality even remotely approaching “perfect” in this sense.
- Third, financial education needs to be entirely flipped on its butt. Our “glorious” public education system doesn’t teach our teens enough about online banking, earning potentials, cost of living, mortgages, auto loans, student loans, etc. The financial education that I got in high school was a week long. From what I remember it was mostly about how to balance a checkbook. At this time, automatically deposited paychecks were not quite the norm yet. It’s not a bad thing to know how to balance a checkbook, but checks are already archaic. Instead focus on modern banking procedures and show the next generation of leaders how to open an account at a local bank. Give them hands on experience (this is up to you families, not the public schools), not just some round-table discussion about a checkbook while the “home ec” class is burning cookies in the school oven. After high school, the only additional formal “counseling” I got was as I was separating from the military to come back to the real world. Four entire years after making a salary I didn’t know how to properly manage at the time. If instead, I had gotten more adequate education prior to leaving high school, I could likely have an extra $30-50K in my savings. That sounds like a pretty nice down payment on a house right about now!
- I’m certain I could keep adding more points to this argument, but for brevity’s sake, I’ll move on.
So turning financial education on it’s butt like this is no overnight task. Even with the support of the public school system, this would take the better part of a decade to really put into action and see meaningful results. Instead, the more realistic alternative is probably more of a grassroots approach. One that brews from within the household or workplace. What does that imply? Mom and dad, bosses, that’s you guys. Show your kids/employees the real value of money. Parents, open a bank account locally under your kids name(with you as the owner, if needed). Teach them about everything you wish you knew earlier! Bosses, challenge your employees to be as efficient and purposeful with their spending and saving. Show them your successes and failures. Then, just as you would be doing by teaching them, explain that it’s okay to talk to others about money and that they should share tips and advice with their friends. After all, if we want our kids to live a better life than us, I think instilling a stronger sense of community and individual value within that community is an incredibly important thing.
But what about us, right? Well, regardless of your age or financial status, we all have room for improving our financial well-being. Even if you are well off enough to not be too concerned, you can still learn how to be more efficient with your money and even consider the possibility of sharing a portion of it with others to improve their own financial status. But maybe you aren’t that fortunate. Either way, there is always room to improve. There are no ten minute solutions here, but we can at least initiate a lifelong desire to seek out more financial wisdom for ourselves and with some of these younger guys and gals, right! So really though, what can you start doing this week to work towards improving your savings?
- Find a way to better excuse to justify your savings. Seeing them as a survival technique or “necessary evil” can be depressing. Instead, view it as a tool that you will get to use later in life. It is a good thing after all. Treat it like a positive thing and your attitude will change about it. I am living proof of this. More about that in a future post.
- Turn off Netflix or Hulu and read a book or blog, listen to a podcast, or find a group of financial geeks in your area. If you have no clue where to start, check out the books, podcasts, and blogs I recommend right here on my blog! If you’re looking for a local group, check Facebook for followers of a podcast or blog. Often these communities can band together to create some very meaningful interaction.
- Take a good look at where you’re spending your hard earned money. Figure out how much you’re actually saving and check to see if that can be improved. You could drop the cliché weekly latte or maybe it’s something less common but still a practical improvement. Unless you’re sharing every detail with someone, only you can know what that will be.
So this is a pretty heavy and hard topic for a Friday, right! Well, heavy and hard or not, it’s one that is looooong overdue in many communities. I know I’m not perfect, I’m not pretending to be. I am not the most efficient or effective with my savings, but I’m making strides towards improving, just like all of us could. The big takeaway, aside from our generally sub-par savings, is that you’re not in it alone. It can feel like it a lot of the time, but you’d be lying to yourself if you thought it was just you. So, don’t be afraid of that. Initiate the first awkward conversation with someone about their spending and savings habits. Share your story too. Like I said earlier, we aren’t in the position to only hear out the perfectly executed savings advice. Listen to the people who are actually trying. Hear what works for them and what doesn’t. Then think if any of their strategies are ones that you could modify and implement.
As always, feel free to comment with your thoughts. I look forward to every comment and email because it’s that sense of community that I want to grow. This should be a safe and productive place for you to share your financial concerns or successes. You never know who might come across them and learn something valuable!
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