It’s wrong to save all of your money for retirement.
~ Wednesday, November 15, 2023 Blog Post ~
When I was younger until recently, my working life was all about saving money for a comfortable retirement, saving money for emergencies, saving money for the “rainy days,” and saving money for the future. I was always worried about the future and unforeseen events. Hence, I have maintained my savings and financial habits and yearly savings projects since I joined the workforce in 2004, which was 19 years ago.
Moreover, I have become a diligent, aggressive, and extreme saver. I’m not into FOMO and YOLO things. I’m quite proud to say that I’m a financially savvy penny-pincher, cost-cutter, miser, frugalist, cheapskate, Scrooge, and so on. Of course, what I did are not bad, personal finance-wise.
In fact, my financial habits are laudable, especially since I’m always constantly organized with my finances. Besides, mindless saving is better than mindless spending, isn’t it? Or I think what I have been doing all my working life is mindful saving — to the extreme extent. Haha.
Anyhow, I learned and realized from my recent personal finance readings that:
1. Retirement is just one type of fund.
Besides a comfortable retirement, there are other funds for different life moments that require funding, such as buying a home, college education, purchasing a car, travel, weddings, home makeovers, vacations, buying new home appliances and furniture, and so forth. I know saving money for these life events is important, but the concept of “funds” and their specific types just became much clearer to me this year.
2. Savings have purposes.
I realized that, at some point, I will have to spend the money I saved. For instance, when I will be on vacation, that will be the time for me to withdraw the savings I stashed in the bank for that particular event.
In short, I have to use the money I saved in the bank. My money is not supposed to stay in my savings account forever because I’m supposed to use it for some specific purpose I intended. I made this concept clear to me this year and I told myself that I’m not building generational wealth.
It’s funny, but I remember this Daily Mail article about the late The Prodigy vocalist Keith Flint, saying in 2015: “I’m not saving for anything. I’m cashing it all now. I’ve always had this thing inside me that, when I’m done, I’ll kill myself.”
I’m a massive fan of the British electronic dance group The Prodigy, and I just find it interesting that its deceased lead singer had admitted that he would spend all of his hard-earned money rather than keep it for the “rainy days” or the future.
3. Saving ALL of one’s money for retirement is NOT RIGHT.
Again, I learned that retirement is just one kind of fund. With balanced saving and spending habits, I have to spend and enjoy SOME of my money today, while ensuring that I also have funds for the future.
Furthermore, I read that, nowadays, many consumers choose to spend and enjoy the money they saved today, or NOW. They have changed their money mindset after realizing that there was COVID-19 claiming millions of people’s lives, including those of their loved ones, and above all, that we’re not here on Earth forever. People realized that the best time to enjoy one’s hard-earned money is today, or now, while one still can.
Moreover, I realized that by the time I retire in the future, that is when I’m already in my greying years. If I choose to enjoy ALL my life savings that time, such as traveling, I might already have a hard time walking long distances, climbing the stairs of the Uffizi Gallery in Florence, Italy where Sandro Botticelli’s “La Primavera” painting is displayed, and so on. Thus, the best time to enjoy SOME of my hard-earned money is today while I’m still young.
I’m writing this article to correct my understanding and practice of savings. I realized I have been depriving myself, sacrificing a lot by saving most of my paychecks, allowances, and other windfalls for the future.
I also rarely traveled to far destinations in recent years. I have always focused on my passion for writing and finance. I’m always working. My parents told me that it’s about time I take a vacacion grande. Again, the most important thing I realized this year is that saving money is not all for the future, the “rainy days,” emergencies, and a comfortable retirement with financial peace of mind. Some of it should be enjoyed TODAY or NOW.
References:
https://wsj-article-webview-generator-prod.sc.onservo.com/webview/WP-WSJ-0001246558
https://wsj-article-webview-generator-prod.sc.onservo.com/webview/WP-WSJ-0001319827
https://wsj-article-webview-generator-prod.sc.onservo.com/webview/WP-WSJ-0001352274
