Rewind to three years ago. My husband and I had paid off the last of our combined $59,496 in debt a year before that (September 2010, to be exact, less than 5 months after getting married). The celebration was particularly sweet, because thanks to the Iceland Volcano Eruption, our honeymoon to Austria was put on hold…so by the time we could go in late 2010 we were consumer and student-loan debt free!
Those were good times.
The Financial Doldrums
Something changed after we had met all of our goals. We got back from Austria feeling just amazing. And then, we entered this sort of financial doldrums period. We didn't know what we wanted to save for next. And we stayed in this savings-rut for at least a good year.
My conclusion was that it was a bad thing to save money with no purpose at all. Probably because it felt kind of “meh” while we were there. It's not like we were saving for something specific + sexy anymore. We were just saving for saving's sake.
How could I not know what I wanted to save up for? Wasn't there a trip I wanted to take, or something I was supposed to do with all of this money we were fortunate enough to set aside?
I even wrote a post about it that I never actually published, just needing to put into words the floundering going on in my head at the time.
But I now have a completely different outlook on saving money with no specific purpose: it has a very specific purpose indeed.
And it only came out to smack me over the head while reading someone else's question on Facebook the other day.
Saving Money Always has a Purpose
A woman had started an automatic savings plan (you go, girl!). But she was struggling with something. Specifically, she was struggling with wanting to put money into savings that she will never spend. She wanted to know if others had a pot of money they would never spend, and how they felt about contributing to it. In her mind, it was simply to pass on money to the next generation, and that didn't rub her the right way. She wanted to know if others bought into having a pot of money they will never spend, and what their thinking was around it.
Her question spoke to me, and I responded to her within a minute of reading it.
Here's my response:
“I actually have a totally different outlook on savings that you will never spend. What it buys is not tangible. It buys you confidence in decisions because you have a plan B, leaps of faith should you want to take them, security, and being able to base decisions on things not having to do with money. Those are very worth it in my book!”
That answer was based on our own experiences and advantages – gained by having a pot of money that we will never spend – that look something like this:
- Paul and I decided to move to Houston to live in the same time zone together for the first time, before I found a job (now we're husband and wife!)
- Quitting my day job to pursue my passion and build a business full-time
- Getting to Call 5 Months of Unemployment 5 Months of Mini-Retirement
Pretty amazing, right? Do you think we would have had it so “lucky” if we hadn't had a pot of money waiting to catch us should we fall? Nah. I'm sure we would not have taken those leaps of faith, and that stint of unemployment would have felt like an episode on Shark Week instead of a mini-retirement tryout.
Sometimes, it Sucks to Save Money
I'll be the first to admit that sometimes pushing “submit” to send money from checking into savings can suck at times. A few weeks ago I was about to send an awesome $500 from our checking account to savings…and I hesitated. Yes, that money was still ours no matter which account I put it in. Yes, I love to see our savings grow. But sometimes it can feel like you're losing that money (especially when you treat your savings account like a black hole, like we do).
The fact is, if you're putting money into your permanent savings, then you're essentially saying “I'm not going to spend this money for the foreseeable future…or ever”, and so it can feel like it's gone.
But you need to change your thinking on this. Saving money always has a purpose, even if it's not quite defined yet.
If you've got a pot of money that you won't be touching anytime soon, then perhaps it is time for you and your family to take a leap of faith or enjoy some of the other non-tangible benefits of it. Let me know how you are doing just that in the comments below!