Bank Savings just won’t cut it

Since childhood we were taught to save. Save for the future like ants saving for the rainy days. So we set a side portion of our baon and put it in the bank.

Ten years after, the savings is gone or, at best, too little to matter.

The amount saved went to the latest gadgets, spent on things we never even recall what. It is so easy to spend money because we always find a dime a dozen reason to spend. Every time the money in the bank becomes enough to buy something, then it finds a way to slip away.

Now that we have joined the working class we started earning. Yet it seemed not enough. We are left with little to nothing to save after deducting all expenses. And so we kept aiming for promotion.

At last we got double our salary after being promoted to managerial position. A manager needs a car and so we bought one. After all the expenses we are still left little to nothing to save. There too many reasons to spend the savings.

Having realized that money often finds its way out of our pocket and that our savings is not growing enough, we find less value in the habit of saving. And so we develop the mentality that whenever we have money we need to buy a TV, a car, the latest gadgets or anything concrete that we can see or touch because at least we have bought something as a “remembrance” rather than losing it to many things we cannot even remember.

Of course one of the problems is the “Parkinson’s Law” but more on that in the future. Perhaps we can look at the fact that savings just won’t cut it.

We view savings as another pocket to draw money from whenever we need or want to buy something. We save to consume and not for growing money.

Remember what we were told during childhood? Remember the ants saving for the rainy days? Yes that one.

Ants save during dry season so that when winter or rainy season comes they have something to eat.

            
But eating is consuming. If you consume something it never grows but is destroyed in the process.

            
The saving ant analogy won’t cut it. Money will never grow because at the back of our minds we have the impression that we save so that we can consume it later. Our saving ant is a good ant but he saves and consumes and saves over and over again in a vicious cycle.

            
If that savings is intended to grow then we should let it be in the bank. Right?

            
Wrong. As long savings is left in the bank that money will never grow. On the contrary it will diminish its value.

           
I am pretty sure we still remember our folks saying their P100.00 can buy more then. My lolo used to tell me he can buy soft drinks with his 50₵. That was truly amazing.

           
We realized that the bank is giving us less than 1% yearly interest. Heck even if the bank gives us 2% interest every year still the prices of things we buy are increasing at a much faster pace. This is what we call “inflation”.

            
So the growth of our money in the bank will always be overtaken by the increase in the prices of stuffs of everyday.

           
Savings will not work as a vehicle to grow our money. It just won’t cut it. What will then?

Investing.