The qualities which distinguish spending habits and saving habits are more nuanced than they may initially seem when it comes to personal finance.
The qualities which distinguish spending habits and saving habits are more nuanced than they may initially seem when it comes to personal finance. Pinching pennies does not necessarily nourish a flush retirement account. Nor does scrupulous monetary stashing automatically mean a healthier relationship with your bank account during the day-to-day. As with most things in life, cultivating financial wellness – both in the long and short term – is all about balance.
Many of us believe that it’s always an either:or thing when it comes to spending and saving. If you’re saving you’re not spending, and if you’re saving you’re not spending. Truly, however, the two practices can help to support each other if you know how to use them to your advantage
So let’s talk about what really differentiates spending money and saving money, as well as a few key habits you can develop that will help you do both better than you ever have before.
Here are the basics.
Spending money means exchanging the currency or credit of which you are currently in possession for goods and services.
Often when we talk generally about spending money, or people who are “spenders,” we are talking about purchases and expenses which are subjectively unnecessary. However, we are more often obliged to spend money on things we need, including car repairs, rent, food, and so on.
Saving money means taking a portion of the currency of which you are currently in possession and depositing that portion into an account of one designated purpose or other to be used in the future. In other words, not spending the money you have.
This definition is a little more restrictive and may become confused by other money-related language that exists out in the world. For example, when we “save” on a discounted item at the store, we are not actually saving money, but spending less. For our purposes, saving money is a deliberate and intentional activity which furthers the saver’s long or mid-term financial goals.
Saving money is a critical practice to undertake in order to build a more secure financial future for yourself and your family. But this doesn’t mean that you should avoid spending at all costs – in fact, thoughtful use of the money you have when you have it can help you to mitigate other potential money-related risks including the build-up of credit card debt. Careful planning and a better understanding of your own financial reality will help you to both save and spend with intelligence and purpose.
Here are a few specific practices to cultivate for better spending, and better saving.
Origin is a comprehensive financial wellness platform for employees that takes a holistic perspective on personal finance to cultivate greater financial intelligence and future security. With Origin, learners are empowered to take greater control of their saving and spending habits with a critical eye on the relationship between their current income, future spending needs, and day-to-day obligations.