In the story “The Ant & The Grasshopper” during the summer the ant stores grain while the grasshopper plays the fiddle. In the winter the ant eats while the grasshopper starves.
My mother, the farmer would say, “Make hay while the sun shines and save for a rainy day.”
...And some philosophy for the Biblically inclined:
Ecclesiastes 7:12 - “For wisdom provides protection, just as money provides protection.”
I know that that last one might surprise a few folks. People mostly seem familiar with the Biblical misquote, ‘money is the root of all evil.’ The Bible doesn’t say exactly that. It says “...the love of money is the root of all evil.” (1 Timothy 6:10) It’s not the money that’s evil but a person’s attitude towards acquiring it that might cause them to do evil.
Money has a use, it’s a tool. It provides some form of protection. Having it won’t solve all of your problems but there are some problems that money can make go away, just like a toilet plunger can make some problems go away. Whether your problem calls for cash or a plunger it’s good to have the tool handy when you need it. Why deal with crap when you can make it go away?
One reason to save: Having money saves money.
Maybe this sounds odd but it’s expensive to be broke.
Everybody eats and buying groceries in smaller, less expensive, packages tends to cost more per ounce (or kilo) of food. If you can only afford the small package you’re paying more for the meal than a person who can afford the bigger package.
If you get an unexpected, unbudgeted, bill you’ll have to find the money somewhere. If you don’t have it saved you’ll have to sell something, borrow somewhere or delay paying some other bill. If you’re forced to sell something in a hurry you almost always get a bad price; there is a ‘desperation discount.’ If you borrow cash or put off some other bill there will be interest or penalty charges or both. And once the emergency expense is paid you still have to pay back the loan or catch up on the other bill you skipped...plus those extra charges.
To make your loan payments or catch-up payments you have to make sacrifices elsewhere in your life or work extra to come up with the extra cash. And the sacrifices and extra work after the emergency will be larger, greater and more than if you had done it before the emergency. You have to pay the extra charges. Saving beforehand doesn’t charge penalty fees. Saving beforehand doesn’t charge interest, it pays interest.
Working to pay for an emergency before it happens makes you richer. Working to pay for an emergency after it happens makes somebody else richer.
It’s cheaper to save than to borrow. It’s less work to save than to borrow. It’s less sacrifice to save than to borrow.
And nobody goes through life without surprise expenses.
Another reason to save: Having money relieves money anxiety.
In my early twenties I had a roommate who was always broke. He never had a lot of debt but his money always seemed to arrive the week after he spent it. One day I asked him why he was always broke. He didn’t really spend more than he made, he just never had any cash on hand and was always borrowing from friends for emergencies or surprise expenses. And he could always come up with money to pay it back the next month. He told me that if he were to die that day and hadn’t spent every cent he had made and every cent that he could borrow then he would feel like he missed some opportunity.
I understood his choice. I didn’t agree with it, I thought it was short sighted, but at least it was thought out and not impulsive. I’ve always been inclined to save. Even if it’s only $20 a month. I get nervous if I spend every cent that comes in. I told him that the worst thing that could happen to him was to live beyond his working years.
We’re still friends.
About 20 years later we were chatting. He told me that for the first time he had looked at his bank account and seen enough to cover all of his expenses for the next month. “And it just hit me. It feels really good. It’s like there’s no pressure. I can relax. Is this what you were talking about all those years ago?”
“Yup.”
Another reason to save: Having money pays. If you have money in the bank it pays interest. Not much interest these days but a small amount of interest is better than none. If you look around you might find a bank that will pay more than your present one does. And some banks will pay more if you have more on deposit.
The more money you have the more options you’ll be offered for investing. I’ll talk about that later.
So the reasons to save are:
Money is a tool that can solve some sorts of problems.
Having money saves on unexpected expenses.
Having money relieves some sorts of anxiety.
It pays to have money, like getting a tiny raise in pay.
