Handling Money Well – Saving and Generosity

Beyond frugality, saving money steadily and giving money away generously are the prime financial virtues. Working energetically to earn money and then using your money well are indispensable for both success and happiness.

I read an interesting quote from Nancy Astor, who said: “The only thing I like about rich people is their money”. (Nancy was a very rich woman from the 19th Century.) However, rich doesn’t have to mean stingy; it can also mean philanthropy, like in the tale of St. Nicholas.

Some people say they would like to earn enough money so they will have enough left over to save, and also enough money to share. In my experience, virtually anyone who earns money can already save some money and also share.

It is strange that people living in North America have nearly the highest incomes but also the lowest savings rates. By comparison, people living in Asia save 10%, 20%, or even 30% of their salary, even though their base income is much lower.

Anyone can also become generous, however low their incomes. My wife Kathy noted as a young girl that when she sold Girl Scout Cookies in wealthy areas, people often refused to buy them, whereas people who lived in poorer houses were more generous. Sadly, I have also noticed that pattern. But there are notable exceptions of rich folks donating most of their wealth to others. That is far better than redistributing wealth by taxes.

There are countless good reasons to save up money, such as to buy a house or car, to finance education, to guard against unemployment, or to plan for retirement. Regrettably, too many people learn about these reasons for saving too late to help themselves, when they are already old and poor.

We all believe in generosity for the rich, but not necessarily generosity for ourselves, just yet. We don’t want to sacrifice our hard-earned money for others. However, our family and community well-being require regular sacrifices by all those who are able. Government is unable to meet more than a small number of the needs of a community; the rest must be met by concerned citizens.

Ultimately, how we use our money and our possessions define the type of person we become. Being rich and stingy is not a happy way to live.

My advice to my children and to other young people is to start saving and donating their money in roughly equal amounts. Some people might be able to save 5% of their income and also to donate 5%. Others may be able to save 10% or 15% and still donate a similar amount to charitable causes, both in their own community and around the world. Starting these important habits early in life is advisable because spendthrift habits are hard to overcome.

Saving must be long-term and permanent to bring lasting success. We need to build up lots of assets before retirement, to avoid poverty in old age.

Saving and sharing should become our lifetime habits, along with frugality. If everyone worked hard, lived frugally, saved, and were generous, think of how many of our financial and social challenges could be soon overcome?