Why You NEED to Save Money

Why do we need to save money? The short answer – to be prepared for the future. A slightly more detailed answer is to be prepared for future financial needs and life events, because we are generally living longer, and because it is increasingly our responsibility to take care of ourselves (with just a small percentage of workers now set to receive a pension). Future financial needs and life events ranging from the mundane (e.g., an emergency fund and infrequent bills like insurance and local taxes) to exciting, but often daunting, expenses (e.g., a car, home, wedding, college expenses, retirement), and don’t forget the unknown (e.g., an unforeseen healthcare costs) or charitable giving and a bucket list trip or experience. The problem with leaving it here is that this “slightly more detailed answer” was tedious and downright intimidating.

How do we create a sense of urgency without boring or scaring? How about a story.

Will you be ready for the future? The first thought that comes to my head is that the only way to be ready for the future is if you think ahead and plan. Let’s talk about planning.

A tragedy happened while I was working on my book. Notre Dame Cathedral in Paris burned. I can’t stop thinking about it. I share everyone’s sadness. I feel bad for the loss of a notable monument (in its original form), to Paris, France, the Catholic Church, and humanity. My son studied a semester in Paris. We, like millions of tourists a year, walked through it. It was incredible, of course, as you’d expect for something that took almost 200 years to build. My sadness, however, quickly morphed into a genuine frustration. The fire, or the fact that the fire got so out of control, seems totally preventable to me. Maybe I am just being my normal somewhat harsh and outspoken self, the black and white engineer, etc. I can’t help but ask, where was the proactive planning to prevent this catastrophe?

Sure, hindsight is 20/20 but it seems to take only about a minute of hindsight to ask some simple yet powerful questions: Why was there such a slow response, with reports many fire trucks took two hours to arrive? Why did they struggle to pump water out of the adjacent river? Why was there no fire suppression system in the wooden attic structure (literally nicknamed the forest because of the 850-year-old timber that once occupied over 50 acres)? It just seems to me that for such an irreplaceable structure, which housed even more irreplaceable relics, that there would be multiple layers of preventative planning to ensure such a fire could never happen. How about fire stations located on the island right next to the church? How about fire brigades rigorously trained to combat a fire in such a unique structure? How about custom designed equipment to aid in firefighting in the high reaches of a gothic church? How about pre-staged pumping equipment by the river or water tanks to ensure an immediate initial response when any fire is still small? How about extra on-site monitoring during renovation and construction activity? As you can see, I am a bit worked up. Perhaps I am projecting, and I see Notre Dame as representative of a broader problem with governments, businesses, organizations, families, and individuals…we don’t plan and prepare enough, we just mostly react.

Let’s circle back to financial literacy and conclude. How do we plan and prepare for the future so we can take care of ourselves and our children, give something back to others, and not be dependent on others when we are old? The answer is we save money today!

For more information see www.yourfinancialsherpa.com