Why is saving money such a stigma?

Last year I got a large extra paycheck from my old job for back pay that was owed to me. Consequently, at the same time a handful of my coworkers all got a large extra payment of their own too. Once my employer had settled on the money that was owed to us one of my coworkers asked me what I had planned to do with the extra money. Though he did not know exactly how much money we would be receiving, I'm sure he knew it would be at least an extra $10,000 check if not more after taxes. Which was enough to splurge on.... Well, on most anything that you could think of. New flat screen TV? Why not. Surround Sound system, sure, add it in. While we're at it, 10k could even get you most of the way to a brand new modestly priced car. How did I respond:

"Honestly, I'll probably just invest the money."

"Oh, so you'll do something that's actually smart with it." he replied with a sarcastic/disappointed sound in his voice.

It seemed evident in his voice that he knew that it really was a smart decision to make, but it was unexciting and boring. His hopes of hearing me say that I was going to buy a new household robot that would make me coffee in the morning were gone. If our roles were flipped around I would have been curious on what he planned to invest in, I would have been excited to hear about how he planned to save it or what he was saving for. But obviously he wasn't interested in my thoughts on the future and what I thought were good investments.
 

I've also had people tell me "Whoever dies with the most loses the most" after I probably overshared on my savings goals with them. I think it basically came down to them thinking that I should be enjoying my money rather than saving it for a future day that may never come...
 
One thing that I really seem to enjoy talking about is personal finance, I think the reason I enjoy it so much is because I think that I'm pretty good at it. But it's never a topic that I like to bring up first. If someone casually mentions something in that wheelhouse I usually get excited and try to contain how much I let burst out because I know that most other people don't like to think about the realities of how much they should really be saving for retirement or how they should be saving their money. I don't necessarily like to recommend specific investments because to me I view that as a personal decision. How would you feel about someone telling you what you should do with your money? But I really do like hearing about other peoples thoughts on investments because sometimes it gives me new ideas on investing or maybe I'm just a voyeur on what other people do with their money.
 
I find that sometimes if someone I know has a smaller financial goal (than retirement), like purchasing a home, they will crunch the numbers a little and find out that to save for that down payment. Since it's a goal that they can attain in less than a handful of years the task seems big but attainable, but when it comes to retirement I know few people my age that have given it any serious thought or effort. Some of my friends may blindly save a certain percent of their money knowing that's what they should do, but they don't know what they are invested in or have any general idea of how much they even need to retire.

When I do get into personal finance conversations I always make sure to praise people for what they think are big accomplishments. And to be completely honest, some of the things I've heard have been pretty good accomplishments compared to the general population, I just try not to give specifics on what I do because it may suddenly dwarf their progress and I don't want to be that guy that is 1-upping what they are trying to show off about. An example of this would be that someone once told me that they were saving somewhere around $400-500 per paycheck into their 401k. They said it so proudly that I simply acted as if that were an amazing feat and that I was in awe of their dedication. Assuming that they got paid twice a month means they were saving about $12,000 a year which is more than most people under the age of 30 so they really were doing a good job. But I knew that it would seem un-polite to tell them that my personal financial goal is to max out my 401k and Roth IRA each year and then also try to save another $1,000 a month outside of those accounts so that I can buy my freedom in ten years or so.
 
To me I would compare that to a professional basketball player talking to a high school basketball player. Obviously the professional would praise the student for their work and tell them to keep working on improving, but there's really no need to dwarf their achievements by talking about their personal experience. They are just in different parts of their careers so they have a different bar set. The problem that I see is that when it comes to personal finances it's almost taboo to talk about it so most people don't have the slightest idea what other people's goals are so no one knows where they compare. Why is it assumed that you have to work until you are in your 60's. Why do you have to spend more money than you save?  Why can't we be excited for people when they save their money?

6 comments:

  1. You keep going the way you are going you are going to surprise a LOT of people when you retire early!

    I'm a Mr. Money Mustache devotee and I use YNAB for budgeting. What I've learned is there are two kinds of savings. The first, and most common, is saving for a goal (new tires, vacation, new car, new computer etc.) This kind of savings is really not savings - it's deferred spending. Real savings is the stuff you put away into debt (never to be used again) and then investing (never to be touched except for a 4 percent safe withdrawal rate after you retire).

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    1. Early retirees seem to surprise everyone. I hope to be among those people. But at the same time, I'm sure that once I reach that phase of life I will probably try to lay low and not flaunt it since I imagine people will still probably react in much of the same way, "Why did you deprive yourself all those years!"

      The joke will be on them when I have decades to do whatever I want.

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  2. My ex-husband always used to make fun of me for saving. Then, after the divorce, he's telling our daughter to be smart with her money cause he's perpetually broke. I read MMM too and I don't plan to be working forever. I want time to work on my bucket list! :D

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    1. As much as I dislike the idea of being "financially compatible", it can be a good thing to know. If one person wants to spend faster than it can be made while the other doesn't want to work for forever, that can be disastrous.

      I hope your daughter picks up on those lessons in finance! Sometimes seeing what you don't want to become can be just as good of a lesson as seeing the benefits of saving.

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  3. WARNING: This is a ramble: Even when I was making crap for money, I was putting away as much as possible and lived off of top ramen. By the time I hit 26 years old, I had save a hefty sum of money...which I then blew on a life investment. You posed the question, "who would want someone telling them what to do with their money?" and I say, a lot of people. That's why we have advisors and if I could get that advise for free, I would gladly take it. On the point above, I never planned on getting married, but knew exactly what I wanted in a partner if I did. 1) Their parents had to still be together -weird, but my mom went through a ton of marriages 2) They had to make as much or more money as I did AND that amount had to be able to care for themselves and one other person.On a funny side note I remember getting into two arguments with my partner when we first started dating. The first one was over fair food. "I want french fries" they said. I looked and replied, "what? You are not spending $4 on fries. There is a Burger King across the street we can go to and spend 99cents. The second was over a doormat. I wanted the one that was $7 they wanted the $9 one. They knew I picked the $7 because it was cheaper. "It's a freak'n doormat" I thought, "Who cares". Point being I was extremely frugal with my money and over the many MANY years, I had to learn to loosen up a bit to avoid arguments. To this day though I will do the planning and what not to make sure we are getting the best deals and spending the least amount of money. The worst for me is food. I still choke when I spend a lot of money on a "nice" meal, even though I LOVE food because really, "in one end and out the other". Rambling complete.

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    1. You're right that there are a lot of people that don't know what to do with their money and they ask professionals to help them create a plan. I just don't know exactly how qualified at the time I was to give specific recommendations. I knew that my specific recommendations of investments that I was looking at 3 years ago would have been extremely aggressive and would need to be monitored quite closely which is why I choose to keep most of them to myself. Investment recommendations need to take the investor in mind, do you have a timeframe you are looking at? How much volatility can you handle? How often will you check up on your investments? will you do more than check the balance, will you actually continue to research the companies you are invested in to see the current outlook?

      I have a much more conservative plan that I do recommend to people since I know that most people don't check their investments a whole lot. Heck, I'm guessing that if you check your investments once a quarter then you're more up to date than 80% of the population.

      I think with relationships you have to pick and choose your battles. I would have sided with you over the $7 door mat since honestly... you just wipe your feet on it. Personally, I might have looked online for something cheaper, I'm sure there has to be something cheaper to wipe your feet on :)

      Food is also a hard thing for me too. Fancy meals are really just not my thing though, I think once you get above a certain threshold food doesn't become worth paying more for me. When dining out I feel like there's food in the ~$10 per plate range, then you can get to the ~$20 range and it should be a little better (I'm not sure how much better though) then once you get into the $20-$50 range I start not being sure what I'm paying for. Yes, sometimes the food is significantly better, but I don't know if I can tell the difference between a $30 and $50 dinner. I just don't think my taste buds are developed enough to really tell the difference. I can't bring myself to pay more than that for food either, I can't see the value of 1 meal costing more than $100. I would think, hey I could eat 10 meals for $10 with this... I could go out to dinner for 2 weeks for the price of one meal (not that I would even do that).

      But I agree... In one end, out the other.

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