What’s the first thing you picture when you hear people talking about savings accounts? What about when you read about emergency funds?
If I’m being totally honest, I often see little snippets of Lord of the Rings in my head. You know that little balding goblin-y fellow (hobbit?) that clutches the precious ring?
Though, I’ve clearly never seen the movies, I do know my way around a GIF or two.
That’s precisely how I think we talk about savings accounts and emergency funds in the personal finance world. We cannot let those dollars out of our clutches for any reason.
And it makes sense.
Savings is ridiculously hard. Finance isn’t easy, and it’s never just about math.
Plus, there’s been enough conversation lately to know that for may people, a fully-funded emergency fund is going to feel like a lifetime. In fact, research shows that saving one month’s worth of expenses will take most Americans two years.
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But I do think that savings is meant to be spent. Now, this isn’t the post where I tell you that I’ve given into an indulgence and am going to start frittering money away again. In fact, I took time this weekend to officially unsubscribe from Kate Spade’s email list, and I emptied my shoe cart TWICE from the sandal sale at DSW.
What I am going to tell you is that–at this very moment–it is 82 degrees in the lower level of our house and my jaw is throbbing. In addition to feeling wildly uncomfortable and altogether grouchy, I also feel poor. The sweat beading on my upper lip feels like little dollar signs. The fact that I am constantly aware of the teeth in my mouth feels like I am chewing on money.
But here’s the truth: I’m not poor.
I’m going to face two very expensive bills in the next few days, but I am not poor.
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The problem stems from the fact that, too often, discussions of savings rates and growth and progress are linear. Sprinkle in the secret sauce of sweat, give your bootstraps a tug, and bada-bing, bada-boom. Financial success.
The truth is we are all playing a game of Chutes and Ladders. We like to think we’re climbing up and up and up, but we’re all a lot closer to the chutes than we recognize. 2020 has made that crystalline.
Our savings is going to drop. Whether we attempt to cash flow these expenses, pull it from our savings account, or both, I am going to have less money this week than last week. If I tracked my net worth, my guess is it would drop to the tune of a few thousand dollars. Collectively as a money world and individual as a party of one, we and I have decided to make that feel catastrophic.
If it’s not catastrophic, it’s at least unpleasant.
It should be avoided.
But what if that’s actually entirely the point?
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We have savings, and it’s OK to spend it. I just confessed that we could pull the trigger on our mortgage but won’t for precisely this reason. I had no way of knowing that our HVAC would start puffing air with the lung capacity of a bumble bee bat in midst of a string of 90-degree days (Don’t worry, I live in the Midwest. It is most assuredly NOT a dry heat.). I also didn’t know that I would either grind my tooth to oblivion during a global pandemic–or encounter some other soon-to-be-diagnosed tooth trouble.
But I knew something would happen, which is why I saved.
What if this quest for financial freedom that we are on isn’t just about the destination? What if I’m not just growing my income, reducing my expenses, and saving and investing the difference to make my future self happy?
The future is no better than the present. The person that I am set to become in 5, 10, or 20 years isn’t more deserving of happiness, health, or air conditioning than present me.
There’s a time and a place to sacrifice, and there’s a time and a place to spend.
Sacrificing when your energy is zapped, morale is low, and patience is non-existence isn’t some exercise in stoicism. It’s punishment, and it’s a reason to quit.
I’m proud of myself, and I’m proud of my husband. We had some privilege and some luck. We also worked really freaking hard to make this savings happen.
Rather than allowing myself to wallow in scarcity, what if I decide savor the fact that I’m in a position where I can bail myself out? If learning that you can count on yourself isn’t a reason to celebrate, I don’t know what is. We spend so much time celebrating the act of savings, that we forget to acknowledge what that savings affords us.
So Tell Me..Are you good about spending your savings when there’s a need?