The Quiet Wisdom Of Saving

photo by Juliancolton2

“Where is the Life we have lost in living?
Where is the wisdom we have lost in knowledge?
Where is the knowledge we have lost in information?”
-T.S. Eliot
Reading these beautiful words from T.S. Eliot, I am struck by how well they describe our current relationship with money. With so many personal finance books, magazines, shows and blogs presenting information, we women should feel confident in the knowledge that our finances are in order, right?
After a 15-year career in the institutional financial services world, I’ve spent the past few years traveling the country teaching, writing, and speaking about the basics of personal finance for women. The overriding sentiment I’m encountering is… OVERWHELM. There is so much financial information out there, but some how it feels sadly cut off from the process of life and living.
For years I’ve said the three most powerful words in personal finance are “Start Saving Now.” From a purely left brain perspective this remains true.  A dollar you save and invest in your 20s will have nearly five times the power of a dollar you invest in your 40s, assuming a 7% return across all time periods.  Invest $1,000 a year starting at age 20, earning 7% and at age 65 you’ll have $285,000.  Invest that same $1,000 a year starting at age 40 and also earning 7% and at age 65 you’ll have just $63,000.
Key point – you end up with 4.5 times MORE money by starting to save the $1,000 a year in your 20s.
Those numbers are powerful. But they are often not enough to inspire action. My hunch is that it is because these numbers do not touch our souls. Even for those who like math, those figures can seem oddly devoid of joy and life energy. An equation that results in “more” – but doesn’t tells more WHAT.
Enter “MoneyZen.” Let’s start with the notion that money is energy. We earn money in exchange for our time spent working. So when we spend it we are spending our life’s energy (for more on this concept, read Your Money Or Your Life).  Taken further, if we are all connected to a greater source (God, unified field, etc) then money is part of this collective whole as well.  Which gives it a spiritual quality that responds to gentleness and reflection.
Now let’s go back to saving. How much should you strive to save? My current thinking, inspired by Elizabeth & Amelia Warren’s All Your Worth is that a healthy allocation for your after-tax income looks like this:  20% savings, 30% wants, 50% needs. Of that 20% savings, roughly half goes for retirement and the remainder for nearer term needs.
By WHY are you saving? I have come to view saving as process of honoring the energy that connects us all. Putting some money aside is a form of self-care.  It goes beyond simply creating an emergency fund and preparing for some well deserved rest in retirement. I’ve come to view saving as a physical manifestation of respect for the way you’ve spent your life’s energy. By saving you are saying you want to lengthen the time over which you will experience the joy that arises from your earnings. By saving you are also trusting in the future, having the confidence to both enjoy yourself today while also setting some energy aside for additional joy down the road.
So how do you get started saving? By spending less than you earn.
There are many programs and tools available to help you do this (ranging from to the old fashioned pen, paper, and excel method that I use).  But the real financial force comes from having the quiet wisdom that stems from understanding why at the most basic and human level you are saving to begin with.
How do you spend less than you earn? By harnessing the quiet wisdom of saving.
 [This piece originally appeared as a guest post at, a website Manisha loves. Follow them on Twitter @GoGirlFinance].

5 Replies to “The Quiet Wisdom Of Saving”

  1. Hey Manisha, I have not been a big fan of saving because of a misconception I’ve had about what that “saved” money is doing while it’s being saved, but now I see it differently and I’d love to hear your thoughts about the investment of savings.
    To me, saving used to mean having my money in cash (and losing value due to inflation) or invested in the stock market (out of my control and majorly at risk given this economy), but now I am investing my savings in ways that feel great to me — in my own business ventures or real estate and it feels so much better!  Now, I want to save so I can invest in me. 🙂  Your thoughts?

    1. To me… the key factors in deciding how to “invest” your savings are: (1) when do you need to spend that money & (2) how much risk you are willing to stomach.
      For an emergency fund or nearer term needs – so money you’ll likely be spending in the next 5-10 years, I think about the “investment” as being in my peace of mind — taking the trade off of potentially not keeping up with inflation in a money market fund or CD over the risk of not having that money there when I need it.
      For longer term money… it’s all about how much risk you are wiling to take on in relation to your potential need for liquidity. This is where it becomes really interesting. If you’ve got a good head for real estate or a knack for entrepreneurship (like you do!!!) those may feel like “less risky” options than the stock market. For other people who love investing the reverse may be true. I’d say all three options – real estate, your own business, the market are logical ones for your longer term money… and which you’d pick depends upon your personality & goals.
      I just LOVE the idea of you saving & investing in you… with your head for business you are essentially investing in a “the market” — it’s just one of your own creation!

  2. I think some of the problem concerning saving is the consumption culture we live in. What we have is strongly tied to who we are. And watch any news piece about the economy to hear that the American consumer is the make or break of it. Now there is also the decade-long (some say longer) stagnant wage situation. These are difficult headwinds to face for average people. The thought of saving money just isn’t part of the daily grind.

  3. Hi Manisha– I just started using the mint application on my iPad. I loooove it, in addition to keep track of all my receipts on an excel spread sheet. I have a couple of questions:
    1. Is it safe to put all of that personal info into the mint application?
    2. Should I invest my Xmas bonus by buying a share of Apple stock on etrade, or would I be better of putting my money into a CD or into a vanguard Roth IRA?
    PS– I just canceled my cable service. I am streaming the Internet through my DVD player to watch movies. This will save me $70 a month!

    1. Jess – Congrats & so glad to hear! I can’t give one-on-one specific advice but I can say generally…
      (1) They use the same level of security & encryption as the big online banks so – so if you feel comfortable with the later you’d feel comfortable with Mint
      (2) Read this post on “The Four Most Dangerous Words To Your Portfolio” –
      –> if I were you I’d either use the money for short term savings (CD or money market fund) or longer term retirement savings (your Vanguard Roth IRA) but it’s sort of like asking what should I eat for dinner, at the end of the day only you can answer. But this post should give some good food for thought 🙂 so you can make the best decision for you situation
      Happy holidays!

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