It was a beautiful sunny day and I was enjoying a walk back from my Sunday badminton session. As the warm late September air gently blew past me an ugly thought invaded my mind and disturbed the otherwise sublime day. My mind wandered and became stuck on wondering ‘what is the most common way that people insult me?’ Weird thought I know… But bear with me.
I realised the most often words I get called are associated with my habit of saving and my drive for financial independence. For example, I get called things such as, ‘stingy’, ‘tight’, ‘fun-sponge’ and ‘scrooge’, sometimes by my own family. Now the people that call me this are using these words as playful insults and I certainly don’t find any offence in them. But it still gets me thinking, why do people feel the need to target my desire to save money?
I think we need to start by looking at British culture and deep diving into the education system and its failings to properly educate us on handling money. Furthermore, we should look at our society and address why so few of us save money.
My family know the virtues of saving money and respect that you have to put away today for a brighter and more secure tomorrow. But they haven’t been educated properly on the best ways to accumulate this wealth. Their ways of accumulating money is to use completely risk-free tactics such as cash ISAs and maxing out how much you contribute to your pension. When I first conversed with them about the stock market, cryptocurrency, matched betting and setting up businesses they would look at me as if I was an alien. So why did they look at me like this? This is not simple to answer and will need a multi-faceted approach.
Firstly, because the British education system doesn’t properly teach risk and reward.
When you mention the word ‘risk’ to anyone in my family they get jittery, especially when that risk is applied to money. Unfortunately, unless you were born with a silver spoon then you will need to leverage the power of risk to make your way in the world. To do this successfully you need to balance the risk with the reward and do this multiple times to ‘make it’ in life.
It’s a fact that the richest people in life are the ones that own and/or have set up businesses, whether this was by their parents or by their own hand. A business is the money printing machine you need to get you earning way more than a job could ever get you. The issue with setting up businesses are that they are risky, up to 90% of start ups fail within their first ten years. There are a multitude of reasons for this but overall the numbers are very much, not in your favour. This huge risk can be very off-putting and scare many of us from ever taking the leap and starting a business.
But with these large risks comes the possibility for large rewards, it’s all about looking at the opportunities that are out there and weighing up the crucial ‘risk to reward’ ratio. For example, buying a lottery ticket to win the next euromillions is incredibly risky (1 in 139,838,160 chance) and it is unlikely you will ever win the jackpot. On the other hand, setting up that business will still be risky (1 in 10 chance of surviving longer than 10 years) and it wont necessarily make you a mega-millionaire overnight, but there’s a feasible chance it’ll provide you with the means to complete your FIRE journey.
Schools don’t provide any education in financial matters.
From memory, I have never received any education regarding loans, savings, investing and finance at school. Trouble is, this is a common occurrence across the land and you will struggle to find a school which teaches these things. Now there’s different reasons for this including, teachers not feeling qualified to teach finance, an already crammed curriculum and a lack of professionals to help guide students. The trouble with this is teaching personal finance is reserved for the students parents/guardians. If the adults never received financial education and may not be in a good financial situation themselves then how do they teach their kids? This leads to an unbreakable circle in which generation after generation suffers with financial problems. Obviously, there are many other reasons why families suffer from financial problems, some of which they can’t do anything about and this only exacerbates the problem.
British culture makes it incredibly difficult to save.
Our culture makes accruing wealth hard, there are a few different factors involved in this. Firstly, we have adopted a ‘keeping up with the Jones’’ approach to life. When we see something our friend, neighbour, family or colleague have we feel the desire to purchase the same thing and to be able to show off.
The next thing is we tell ourselves that as we earn more we will save more. Commonly, this doesn’t happen and we actually fall for something called ‘lifestyle inflation’, this is where as we earn more, we spend more and this is the arch enemy of the true FIRE enthusiast. This is a serious issue and one which I will devote many an article in the future to combatting.
Currently savings rates in the UK are terrible, the highest regular saver accounts are around 1–2% annual interest and only allow you to withdraw your cash a few times a year. Typically this has been our go to for saving as the government insures your account up to £85,000 in case the banks go bust. Also, your money always ‘goes up’, it doesn’t fluctuate like with stocks or the housing market. Only making 1–2% a year is barely enough to keep inline with inflation and therefore represents a bad strategy for growing your wealth, it is fine however for setting your money aside to save up for large purchases and rainy day funds.
So to wrap up this article, these are the few reasons why I believe I get targeted for my frugality. Society is geared in a way to not make us financially savvy, by not providing the relevant education and by pulling us towards spending money and not putting that money to work for us.
I believe the British education system needs to be changed to reflect this, even just one lesson on financial education, once a week, would provide a wealth of knowledge (pun fully intended). Children could learn how to properly save money and make that money work for them, then in the future they wouldn’t grow up to tease people who save money but actually be one of them.
In the meantime, whenever I get a comment about my money antics I wont take it to heart. In fact, I will carry on with my day and keep a smile on my face, because I’m playing the long game and in this game the ultimate aim is financial independence and the boatloads of joy that come with it.
Thank you for reading.
Disclaimer: The views in this article are not financial advice and merely represent my opinions. Always seek the advice from a licensed financial advisor before making decisions regarding your money.
You should carry out your own independent research before making any investment decision. My publication does not take the specific needs, investment objectives and financial situation of any particular individual into consideration and any investments mentioned may not be suitable for you. You should not base any investment decision solely on the basis of the information that I publish.
