Is Saving Money Pointless? Here’s Why It’s Vital in 2024

This post tells you why saving money is not pointless. With rising prices and increasing cost of living, more people are giving up on saving. But you might be in for a nasty surprise if you empty your bank account and join the YOLO movement.

Before you make a grave mistake, read the article below. You’ll see that having savings is now more important than ever.

Why Savers Are Losers

1. We Could All Die Tomorrow

COVID-19 has shown us that pandemics aren’t an invention of science-fiction movies. They are real and can happen anytime. The risk of wars and climate change, which is already underway, also add to the worries about our future.

Is it worth saving for a house deposit when the future looks bleak? Let alone starting a pension. We might as well enjoy today because our past actions might have already murdered tomorrow.

2. Houses Are Unaffordable Anyway

Were you planning to live in your own four walls? If you save for a house deposit now, you might be in a care home when you have sufficient savings to buy a property.

So if you have no chance of ever saving enough money, why bother even starting? Plus, renting has advantages, too! Thus, it’s best to spend all your money now, right?

3. Inflation Will Eat Your Savings

A good savings account might give you one or two percent interest if you are lucky. With inflation, the money in your savings account loses 2-5% of its value every year.

Think of it as a treasure chest with bank notes slowly rotting away. Who wants that? You might as well spend your money before it is worth less than your used socks.

4. There Is No Reason to Save

With an uncertain future, unaffordable house prices, and inflation, there is no reason to save, right? Surviving and making the best of the moment takes all the energy we can muster.

Why You Still Need to Have Savings

No matter how bleak your outlook is, you still need savings. The YOLO attitude might help you today but will bite you tomorrow. If you think saving money is pointless, think again.

1. Chances of an Apocalypse Are Still Low

I agree that it is likely that humanity will eventually die, whether it is due to wars, COVID 2.0, or an asteroid colliding with the Earth.

However, humans have been on the planet for 300,000 years. The chances that the end will happen during your lifetime are low. No matter how convinced we are something might happen, we can never be certain.

So, even if you are a doomsday fanatic, put out your bins for collection and consider your pension.

2. Emergencies Can Happen Any Day

While waiting for armageddon, you can still have accidents and emergencies. Your roof might leak, your car might become a liability, or you might lose your job.

You need an emergency fund to cover these incidents. An emergency fund is money in an instant-access bank account reserved for financial emergencies.

Everybody needs one, whether you are:

• In a cult waiting for the sun to explode
• Depressed by house prices and inflation
• Or just someone not believing in savings

If you do not have an emergency fund, you may find yourself homeless, without food, and still having to wait a thousand years for the end of humanity. If you think money stress is killing you, an emergency fund is your best friend.

3. From Nothing Comes Nothing

If you don’t start saving, you will never have savings. Right now, it may feel discouraging to start saving, knowing you can never afford a house or buy avocado toast. However, your circumstances might change.

Property prices have crashed in the past, so they might again. Or your income may increase. Or you may find that you underestimated your ability to save.

Whatever it is, you will stay below your potential if you never try to save money. Who knows, you might even be able to save £10,000 in one year.

4. There Are More Meaningful Ways Than Saving Accounts

Inflation is eating the money in your savings account. But there are ways to protect yourself against inflation. While you should keep your emergency fund in cash, you can put your other savings to work.

Even millionaires only keep 25% of their wealth in cash. There is a better way to grow your money: investing. When you invest money, you can get higher interest than the inflation rate. Therefore, you will generate more money.

You can invest in stocks and shares or in yourself. As long as you do your research and invest well, you should beat inflation. When you invest, your capital is at risk, and you may lose money.

Frequently Asked Questions

Is It Better to Save Money or to Spend It?

Spending money is fine. Don’t feel guilty if you spend a little bit on yourself or occasionally splurge. However, you also need savings to cover emergencies and build your future. Striking the perfect balance can be hard, but as long as you try, you will get somewhere.

Do Savings Accounts Beat Inflation?

Savings accounts don’t typically beat inflation. Their interest rates adjust based on inflation, meaning you’ll always stay below it. The only exception is promotional offers, which are often time limited. If you want to beat inflation long term, you must invest your money.

Is Saving Bad for the Economy?

Saving is not bad for the economy. Your savings will be too small to have any impact on the economy. As a whole, saving is actually good for society. Having money in your current account can soften the effects of economic downturns.

Should You Keep Cash?

Yes, you should keep cash. It’s important to have money available for emergencies. However, you should not keep all your money in cash. Cash has the advantage that it’s quickly accessible, but it doesn’t generate interest.

Is Saving Money Worth It? Summary

Given the current state of the world, you may think saving money is pointless. However, there are still reasons why you need savings:

• The world is not likely to end tomorrow
• Emergencies can happen at any time
• Your finances will never get better if you do not start
• Investing is a powerful way to generate wealth

Go out, splurge, and have a good time, but do not commit yourself to the YOLO lifestyle. If you do, you will regret it later.

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