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Saving or Hoarding Money? Here Are the Tell-A-Tale Signs!

May 24, 2018 | 2 years ago | Read Time: 3 minutes | By iKnowledge Team

‘Save for a rainy day’ goes the saying, but you must know there is a difference between saving money and hoarding. The outcome of these two focuses is disparate, depending on the mind-set of the saver and hoarder.

A hoarder believes that a limited amount of resources is reason enough to hoard without spending. This is embedded in the fear of going broke.

Conversely, the intention of saving is to set aside a sum on money for a specific purpose or to fulfil a future goal. By saving money, you’re making an investment for a brighter future. You believe in the ability of attracting opportunities and abundance through saving to increase your wealth and ensure long-term growth.

To explain in an analogy, hoarding is if you stuff all your money in a mattress while saving is to put your funds in a bank to earn interest.

So, if you’re conflicted about being a hoarder or a saver, ask yourself these two questions: Why do I want this money? What am I going to do with it?

And if you’re still not convinced, here are some signs that will help you:

Signs you’re saving money:

  • Money is earmarked for a specific purpose

If you have set aside your money to fulfil a specific need, it means you are saving.

  • You are going to utilise the saved money

Savers know where and when they are going to dip into their savings to make use of it.

  • You allocate your money effectively

Savers have their targets specified and efficiently apportion their money between spending, saving and investing.

Signs you’re hoarding money:

  • You are saving just out of habit instead of a purpose

If you don’t have a specific purpose towards your hoarded funds, it’s a sign you’re saving just to fulfil a habit. Your savings are futile if they trade off present needs for no specific future purpose.

  • If you’re accumulating money despite having enough

We all make budgets where we predict our future expenses and allocate money towards them while attempting to save. It’s wise to have a certain percentage of your income as a savings target and set aside a fund for your post retirement needs. But, excessively adding to this ‘fund’ is redundant as this overly-accumulated, precious money can be invested or diverted towards better use.

  • Despite being able to afford things, it is hard to spend

As a commodity, money needs to flow otherwise it leads to stagnation. This makes it important to spend it. You might not be a spendthrift in general, but if spending is hard for you, it’s a sign of hoarding. Hoarders resist spending money, sometimes even on necessities. Despite being able to comfortably afford what you like, not spending on useful experiences makes you miserable.

  • You have a hard time letting go of money

If the thought of parting with your money gives you anxiety or using the money you have saved makes you uncomfortable, chances are- you are holding on too tight. This does not mean you blow your hard-earned money but obsessing about it prevents you from living a fulfilling life. If you have more than enough wealth for yourself and your family, consider charity or helping someone in need. Helping the less fortunate brings happiness. The joy of receiving gratitude is priceless when helping someone in need.

  • Making money-decisions are difficult for you

Hoarders find it extremely difficult to make decisions about money. Constantly worrying about money, could make you indecisive between important and not-so important choices. Hoarders spend inordinate time before making a purchase. If you constantly try to weigh the worthiness of every expense, you may need to relook your attitude towards money.

  • If you defer gratification for the future

Sacrificing in the present for a more pressing future need is wise. But compromising the quality of your life by denying necessities and comfort cannot guarantee you a secure future. Instead, allocate your money sensibly by striking a balance between the present and future.

Bottom line:

The focus of saving money should be to enhance your wealth without compromising on your personal freedom while creating financial security for your family. Ascertain your future needs and goals and start by saving small to build your corpus. Your goal may be to provide for your children’s education or buy your dream home or travel to that exotic location with your partner. To accomplish all these goals, look towards investing rather than hoarding.

Money that lies idle makes it unproductive. Instead, invest your savings and add to your wealth. You can start by investing in fixed deposits, ULIPs, and PPFs. These instruments provide reasonable returns and are risk-free.

If you have already invested your savings, it is advisable to review your investment portfolio every financial year to reap benefits from it.

Rather than hoarding money to safeguard against an uncertain future, develop the habit of investing it towards a secure future and boost your wealth. Make use of the money you have worked hard to earn by spending on things and experiences, save an adequate amount for meeting future requirements and invest some part of it to grow.

Advt. no.: IA/May 2018/3965

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