Why You Should Stop Saving Your Money

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Saving more than you spend is the foundation of smart money management. It's something we preach regularly on Frugal Rules. But can you ever save too much?

After years of drowning in debt, I’ve finally put myself in a much better financial state. It took me four years to dig out of the debt hole I created many years prior. It was a hard journey, but rewarding at the end. After making that final credit card payment, I was laser focused on increasing my savings.

I’ve always wanted to have an established emergency fund that should be able to last me at least six months to a year. That’s a good protection plan in my head. Well, I can finally say that we have that covered. The problem now is I’m still laser-focused on saving money. I want to keep adding to my online savings accounts, but now it’s just a waste.

When is enough, enough?

Do I Need to Break the Savings Mentality?


It took me some years to create a savings mentality. I’ve probably pushed too much for it. While I will say there’s nothing wrong with saving, my savings mentality is too strong. I don’t want to let go of any of my money.

I want to see it continue to grow each day. Unfortunately, we all know money doesn’t grow in savings accounts anymore. You can’t retire off money sitting in an account earning less than one percent. It just won’t happen. Compound interest is amazing, but it can’t do much with money earning little returns.

I think I need to break (really modify) my savings mentality. I need to shift it from the traditional ideology regarding keeping my money safe in savings accounts and start moving some of it into an online brokerage account where I can make it grow. I’m talking about using my money to help me grow my wealth. Use my money to grow more money. That’s what I need to be doing.

Luckily for me, I know just the thing to work on. Investing!

After you reach Your Savings Goal, You Should Invest!


Bold statement, I know. 🙂 While I’m sure there are many out there who say investing and saving are synonymous. I would have to disagree. I don’t lose money when it sits in my savings account.

Please don’t bring up inflation. I know I lose buying power, but I don’t lose money. Investing is different. You can gain a lot, but you can also lose a lot. It has been scary for me to transition from hoarding my money to using it for the advancement of my financial goals.

I was scared of investing at first, because I didn’t fully understand it. I thought you had to invest in single stocks and pay close attention to the market. It took me some time and a lot of reading to realize I could stick my money in certain index funds and ride the wave of the market. My money would go up and down like a roller coaster, but in the end, I could hope for a typical eight percent return. That’s much better than the below one percent I would get in my savings account.

People I have spoken with feel the same way about investing. Some people are scared of it. They don’t want to lose their hard-earned money. I know I didn’t and still don’t. I’ve been hoarding my money ever since I paid off the credit cards in 2012.

Saving more than you spend is the foundation of smart money management. It's something we preach regularly on Frugal Rules. But can you ever save too much?

I’ve been watching my money grow, but very slowly. It took sites like Frugal Rules and others to show the error of my ways. I was afraid of something I knew nothing about. I was allowing hearsay and speculation ruin the advancement of my money agenda. I was not being fair to myself or my money.

I’m slowly learning to break away from my money saving mentality (more like hoarding) and pushing myself to break into actually using my money to make more money. Learning to invest doesn’t have to be scary, it can be quite simple really, and it should be a part of everyone’s financial plan.

Most will be hard pressed to reach retirement without actually investing some money in the market. You don’t have to give into the idea that you have to invest in individual stocks. You can go with the humdrum method and pick index funds that will allow you to track different parts of the market. It’s much more stable and can help the beginner/average investor do something with their savings. Remember, your money can’t do anything for you when it sits in a low interest-bearing account or under your mattress!


At what point do you think you’re saving too much? Why do you think people are prone to just leaving money in savings accounts as opposed to trying to grow it more? Do you think a saving mentality can ever be “wrong” or over the top?



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Grayson is the owner of Debt Roundup and Empowered Shopper. He also co-owns Sprout Wealth and Eyes on the Dollar. After going to battle and winning against consumer debt, he decided it was time to learn how to use credit wisely and grow his wealth. He discusses all things personal finance and is not afraid of being controversial. He also is a freelance writer and blog manager.

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  • That is what I realized after some time. Money doesn’t grow in banks. I should have invested it earlier in different stock markets. Had I made money work for me, I might have gotten enough money for retirement, Gray.

  • Funny how some people find it so hard to save while here you are, needing to stop yourself from saving! haha!

  • Kalie says:

    So how much savings do you recommend? We’ve followed the 3-6 months expenses suggestion. And what about the early mortgage payoff vs. investing? I know investing more earlier will earn more interest than what you’d pay in mortgage interest, but there’s also an appeal to have the flexibility of no mortgage. Plus you can invest your monthly mortgage amount once you are out of debt. Just curious what your thoughts are.

  • I just bought my first non-retirement investment funds a few weeks ago. It was scary to put something I needed less than 40 years from now into investments.

  • I think if saving takes away your quality of life now, then you are saving too much. I am all for saving as much as possible so I can be financial independent one day. But there are no guarantees in life and I would rather enjoy my entire life along the way than live like a miser waiting for that one day to come where I was financially independent.

  • I definitely have money-hoarding tendencies. I always feel like we need this huge emergency fund. Now that Greg works at home, I feel that way more than ever. We do invest heavily though, so at least there’s that.

  • Investing can be scary. But after reading a few books on index investing and asset allocation I’m feeling much more comfortable with it. The only concern I have now is that the markets are pretty high, with multiples close to the top end of historical values, so there could be a correction in the future if things continue on this path.

  • I haven’t started investing outside of my 401k and Roth IRA yet, but that’s because I’m trying to build my emergency fund still. I’m trying to get it to at least three months – right now I’m at 1.5 months.

    But once that’s done, I’ll be investing and having my money grow.

  • I think I spend the bulk of my time with my clients mentally preparing them to rip the band aid from saving up in a bank account to investing their money. For some people, it has literally taken months of coaxing to get them to move. Every single one, though, ends up happy in the end once they start watching their money grow.

  • Tonya Stumphauzer says:

    I don’t think any savings plan is wrong…just that some may have more advantages. I’d say once you have enough living expense (and each individual has to determine their safety net needs) to cover emergencies, then it’s time to move on to other savings goals. That may mean investing, or maybe it means a downpayment on a house, or a college fund.

  • We hoarded money after paying off credit cards, but we’ve used lots of it for real estate. It’s hard to know what the magic number for a savings account should be, but once you figure that out, then the rest should go into something higher yield.

  • I’ve seen this fear of investing in many people, but just saving money in a savings account isn’t going to hack it. Your money really won’t grow there. I’m a big believer in low cost index funds and nowadays with all-in-one funds…it really doesn’t have to be complicated to invest. Sure there is risk in the stock market, but there are great rewards as well.

  • Other than their 401(k)s and maybe IRAs, my parents didn’t invest. So I’m definitely intimidated. Plus we’re gutting savings later this year on big medical bills.

    So it’ll probably take me some time to come to grips with letting go of my money with risk.

    Once we can max out the retirement accounts (including my SEP), I’ll find some mutual funds. By “find” I mean either ask an adviser or Vanguard or whoever I’m supposed to go to.

    But I also want to save for a rental house. And want to pay off the mortgage early. So I really have no idea when I’ll be able to comfortably enter the stock market.

    Instead, I’ll probably just start setting aside a small amount each month and start putting that into a fund. That way, I don’t miss it (much) in the budget, but I won’t wait until all the other goals are accomplished.

    Still, until we can max out the IRAs, it feels redundant to get into other investments.

  • Reece says:

    Yep, I like you style.
    I think I’ll end up following the same kind of path as you- once I’ve got an emergency fund saved (still a long way off, but better than living in debt!) I think I’m going to focus on paying off my mortgages.
    To me, putting more money into my investment properties is a similar plan to putting money into the stock market. The only thing is that I know that once my money is in that house, it has to stay there. Liquidity: not so great. But hey, that’s what we have an emergency fund for, isn’t it?
    Great article by the way, it really made me think about my future financial plans.

  • This is an important message for millennials in particular. I realize paying down debt is important, but if the interest rate is low (under 5% – I even say under 6 or 7%….) I think it makes sense to get some of your $ in the stock market. With the tax advantages, employer matches, employer stock programs, etc. you can have material long-term gains over time compared to the “relief” of having debt gone. I’m sympathetic to those who really want to pay down debt, but I’m staunchly in the low interest debt-invest camp. Wait this post was about saving, not debt vs investing….sorry!

  • The only investing I’m doing right now it thru my 401K at work (to get the employer match). I have it going into an index fund much like you said. I have a long time until retirement so I thought this was the best way to watch my money grow until then.

  • Michelle says:

    I just never feel comfortable with my savings amount. I always feel that I will need more and what if this happens, etc.

  • Janeen says:

    Did you write this for me?! We’ve always had a magic savings number that we passed a while ago, just haven’t gotten around to investing the surplus. Like other commenters, we’re so focused on paying off our mortgage that we just keep piling it up, figuring that we’ll drop that bomb on Wells Fargo in the next couple of years. (Hi, NSA! Just referring to paying off debt!) I think we just need to exercise out non-retirement investing muscles a bit and get a couple of new funds in the portfolio.

  • Chris Muller says:

    I think saving anything more than a few thousand dollars in MM accounts is too much. People should really be putting their money to work via stocks and even bonds. I think we’re just conditioned this way – to have a set amount as “emergency savings” because that’s what we’ve always been taught to do. I really hate that theory. I agree that we need safety to an extent, but if we don’t take any risks with our money, we’ll actually end up LOSING money due to inflation. Great article Grayson, love your thoughts!

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