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There is No Such Thing as "Savings"

The Money Mastery system teaches in Principle 3 that there is no such thing as savings. But you may be thinking, “What!? No savings?”  Before you get too up in arms, let me explain.  All money is to be spent, it just depends on where and how you spend it, so this principle teaches there is no such thing as savings, just “delayed spending.” Doing away with the savings mentality and instead looking at savings as a spending category in your Spending Plan helps you have a system for controlling this money. You no longer look at it as “extra” cash that you can have access to as you wish. It becomes “spent” money that is no longer available to you — it is spent into three very distinct and important categories that you track. This way, once it is accounted for in the Spending Plan, it is basically “gone.” If you do away with the idea that you must put away money and instead think of spending all of your money in the right places, all of the time, then once the money is all spent into these places you won’t be tempted to dip into it, robbing yourself of your future.
What Are the 3 Vital Savings Categories?
Emotional Savings. This is a spending category that perhaps you have never even heard of. But isn’t it important to have an emotional fund, money that can be used anytime, anywhere andshutterstock_44998930 (800x600)anyhow and not affect other saved money?  Of course the answer is yes! This fun money spending category takes into consideration that you will sometimes spend money on impulse, or just because you want to indulge in something. There is nothing wrong with this as long as you have prepared for it, because just like an emergency that you must save for, an emotional spending event will also happen at some point. Why  not be ready for it? If you are, then it will not affect your ability to pay down debt, or stay on track with your other spending categories. Think of it as if you are on a diet. No diet works if you must adhere to it strictly all of the time. For a diet to be successful, you must be allowed a little chocolate cake or an ice cream cone occasionally. That way you can stay on track and still lose weight. The same goes for emotional spending. If you have to stick to a severe budget all the time and are never allowed to have fun and splurge once in a while, you won’t stick to a spending plan. Emotional savings is an absolutely essential spending category.
Emergency Savings. It goes without saying that you must also have an emergency fund, when the unexpected happens so that you have reserve money to handle these kinds of emergencies. Creating a category for this kind of “spending” in your Spending Plan is critical. Be sure to work towards building up at least three months of income and work up to six month’s worth.
Long-term (Retirement) Savings. Now, lastly, isn’t it most important to have money for retirement?  Perhaps it is the most important. There are many ways you can assure yourself that you 18284are spending enough money into this category (through long-term investing options, real estate, making use of available resources, etc.) but if you need more help with this, contact me directly.
If you agreed with me that these three categories are essential why not spend today’s money into these three “deferred” accounts? By doing so, the money is emotionally gone and no longer available. That makes it very  hard to dip into when you may be tempted to use it for something other than what it is allocated for.
What is savings then?  It is nothing more than delayed spending.  It is nothing more than money you pay yourself every month and is just as important to pay as the money you give to the credit card company, the grocer, or the utility company.
U.S. statistics show that less than 25 percent of all workers who have access to “invest” into a 401(k) have the surplus to participate.  Therefore they have a spending problem.  If they cannot control their spending, they will never be able to have surplus to “spend” into an emergency, emotional or long-term savings account.  I contend, stand firm, completely confident that controlling spending is everything!  It is important for everyone who wants a secure future to learn how to spend today’s money into a “delayed” account for spending with a purpose for their emotional needs right now, emergencies that can happen at any time, and for retirement needs that are sure to come in the near future.

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