39 | Why Do We Save?: The Underrated Reason

We save in order to keep flexibility in our finances.

A habit of saving - income (purple) consistently exceeding spending (red) - is the equivalent of playing a card game with wild cards.

The flexibility and combinations that come from having wild cards in your hand completely changes every hand, every decision, and eventually the entire game.

If you have an established habit of saving then you can...

Take a pay cut to make a career change or shift to part time without changing your underlying lifestyle.

Say "yes" to a once in a lifetime opportunity without crunching the numbers or wondering if you're being reckless.

Spontaneously give money to an organization or person that means something to you because you want to or because they have a specific need.

Temporarily re-direct funds that have historically landed in a bank or investment account and for a season cover college tuition or a car purchase or a trip.

The flexibility afforded by saving can be hard to wrap your mind around, because we think of "saving", or "not spending", as constraining.

It's too easy to think that "spend whatever you want" is flexibility.

In actuality, "spend when you want" is a truer form of flexibility that comes only from a habit of saving.

Additional Reading
Overstuffed by Seth Godin