Savers

Here is an interesting statistic that might make you ret 80% of retirees never spend all their retirement savings. Actually about one-t And on average, retirees only spend 25% their savings during their entire retirement. So what does t It means that many retirees are actually saving more than they need. Quite interesting, right? We talk all the time about how people are not saving enough for retirement. However, what these stats show is that for those who do save, many overshoot their target. And for some, buy a wide margin. Well, then does t We should all strive to live below our means, invest diligently, and plan for our future. That is a fact. But could we all be a little smarter about how we save? Could we be a little wiser about living a more balanced life between today and tomorrow? For those of you who go to the extremes when it comes to savings, I say probably yes. And that is what I want to discuss So to kick t Sign n You neglect your current life for future security. Essentially, do you negligently postpone living your life today so you can have more money tomorrow? Are you putting off that medical checkup because it costs $300? Aborting a dentist even though Skipping therapy sessions that could genuinely improve your mental health? Or maybe you're delaying essential home repairs? That leaky roof? Those worn out breaks in your car? Or basic maintenance that keep you safe? I say when you have the financial means, but you're still sacrificing your health, safety, and well-being to save money, you might have crossed over into the over-saving territory. Here's the reality. If you're not taking care of yourself today, what's the point of having all the money in the future? Your health is your wealth, and ignoring it now could cost you far more later, both financially and in quality of life. Sign n You constantly experience extreme frugality fatigue. Again, being frugal is a good t It shows that you're actively t However, there are times when we can take t You over-analyze every single purchase decision. You spend 20 minutes researc You constantly calculate the opportunity cost of that $5 latte. T Now again, a moderate level of t However, for always t Your brain has limited capacity for decision-making, and if you're burning it all on whether to buy generic or name brand cereal, you're not going to have any energy left for decisions that actually matter. Understand that smart savers make quick decisions on small purchases and spend their mental energy on big financial moves that actually build wealth. Before we get to the next sign that might signal you're an over-saver, I want to share a free tool I t In the course of my content creation journey, I had the good fortune of talking with hundreds if not thousands of people about money. And one of the trends I've noticed throughout all these interactions was t Some of you are amazing as sticking to a budget. Others of you are excellent at staying calm through all the market volatility. Well, if you're curious to find out what your own personal money strengths are, you're in luck my friend. I created the money superpower quiz to help you identify exactly what your money strengths are. The whole quiz takes just a few minutes, and when you're done, you'll get a personalized roadmap showing you exactly what your money superpower is and how you can best leverage it to your advantage. So don't wait, go to the link in the video description below and take the quiz today. Alright, with that, back to the video. Sign n Your social life suffers from money anxiety. T Are you avoiding social situations entirely because they might involve spending? Do you feel anxiety when friends suggest dinner out even somewhere affordable? Maybe you're making excuses to avoid birthday parties, work events, or family gatherings because you don't want to spend on gifts, drinks, or gas. Or you go, but you spend a whole time stressed about every dollar you're spending instead of enjoying yourself. You might not realize that at the time, but here's what is really happening. You're trading relations Research from Cornell University shows that people who spend on social experiences report Meanw Money in the bank, but poor and meaningful relations And to be honest, if you're smart about it, many social activities do not cost that much. Coffee with a friend might cost $5. A pot Even a dinner out might be $30 to $50 if you're wise about how you go about it. Understand that if you can well afford these social expenses, but choose not to participate because of your money anxiety, you might be over-saving. You're prioritizing future financial security over present happiness and relations Sign n You're hoarding a ridiculous amount of cash. Now, we all need a good level of liquid cash at all times. You just never know what life will bring, and not However, there is a massive difference between having a smart level of emergency fund and cash hoarding. I've seen friends and colleagues who have said on hundreds of thousands, some even several millions of dollars of cash. All parked in savings account earning essentially not They're constantly afraid of what ifs. What if I lose my job? What if Invest the money in the market crashes? What if the aliens invade earth? But the irony here is that by trying to avoid all risk, you're taking on the biggest risk of all. The risk that your money won't keep up with the cost of living. That is not financial security. That in my perspective is financial self-sabotage. Sign n You're doing low value activities to save money. T Many don't realize that they're spending significant time and energy to save money, to be honest, in the long run, won't make that much of a difference. Driving 20 minutes out of your way to save 10 cents per gallon on gas. Spending hours researc Or watc The key to recognize that time is one of your most valuable resources in life. More than money, more than anyt Because it is somet So when you're using that precious resource in the spirit of saving small amounts of money, in my book, you've lost sight of the bigger picture. Alright, now that we've identified the warning signs of over-saving, let's talk about what smart savers actually do differently. And why their approach leads to better financial outcomes and a more satisfied life. The n Smart savers focus on balance, not extremes. Smart savers understand that money is a tool to create the life they want, not an end goal in itself. The goal isn'to lay on our deathbed with the biggest pile of cash. That doesn't lead to a balanced or a satisfied life. And data actually supports t According to Federal Reserve research, people with moderate, consistent saving habits often have better overall financial health and extreme savers. Why? Because they're participating in market growth w So w Seek balance. The n Smart savers prioritize T Smart savers focus their mental energy on decisions that actually move the needle. They spend their time optimizing their investment portfolio, negotiating their salary, choosing their right insurance coverage and maximizing tax advantage accounts. They understand that a single successful salary negotiation can be worth more than years of buying cheaper coffee beans. Any smart asset allocation decision can generate thousands more in returns than switc Bottom line, work smarter, not harder when it comes to your financial decisions. The n Smart savers understand opportunity costs. Opportunity cost is the value of the best alternative that you give up when making a choice. In simple terms, it is what you're missing out on by choosing one option over another. Smart savers are constantly asking themselves, what am I giving up by doing t When you spend two hours driving around town to save $20 on groceries, your opportunity cost might be the $100 you could have earned working those extra hours. All the time you could have spent with your family or even just the mental energy you could have preserved for more important decisions. Over savers often ignore these Difference n T Smart savers do not view present spending and future wealth as mutually exclusive. They understand and they actually go hand in hand. A smart saver will spend money on preventative health care today because they know it's cheaper than emergency care later. They'll invest in professional development today because it could lead to a salary increase in the future. They'll invest in their relations Over savers on the other hand, often penny pinch their way out of opportunities. They'll skip the doctor's appointments that could catch health issues early, avoid networking events that could lead to their next job opportunity, or refuse to invest in learning new skills because they can't see past the immediate cost. They're still focused on preserving money today that they end up costing themselves significantly more tomorrow. The n Smart savers use data not fear to make smart financial decisions. Fear is an important emotion because it can help us avoid genuine dangers and make prudent decisions. However, it shouldn't be the primary driver of our financial choices. That only leads to analysis paralysis, missed opportunities, and just bad decisions. And smart savers understand they know that over the past 30 years, the US stock market has averaged about 10% annual returns, w Thus they understand that $10,000 invested in the market 30 years ago will be worth about $175,000 today, w That $160,000 difference drives their decision to invest consistently rather than hoard cash. Smart savers build wealth and live well simultaneously. They understand that the goal isn'to have the most money when they die, it is to have enough money to live the life they want w So now the big question. If we find that we're in the over saver category and we want to transition to the smart saver category, how can we do that? Well, an excellent question my friend. Let me share with you my 5 question smart saver assessment. Everyt Question n Here's a reality. Most financial experts recommend 3-6 months of expenses for people with stable income and 6-12 months for those with volatile income But I constantly see people with 3, 5 sometimes even 10 years worth of cash sitting in savings accounts. The key is matc Stable career with a pension? 3 months is probably fine. Freelance grap Maybe 9-12 months makes sense. But anyt Question n Do you drive 30 minutes out of your way to save $3 groceries? Spend hours researc Choose a slower, more inconvenient option just because they're slightly cheaper? Remember, your time has value, often much more value in the small amounts that you're saving. If you make $25 per hour and spend an hour to save $5, you've actually lost $20. Smart savers value their time appropriately and focus their energy and decisions that actually impact their wealth. Question n T Are you skipping medical checkups because they cost $200? Aborting a dentist even though you need that cleaning? Or maybe you're saying no to social activities with friends and family because they cost money. Here's what over-sivers miss. Your health and relations What is the point of having money in the future if you're not healthy enough to enjoy it or connected enough to share it? Research shows that people who maintain their health and relations If you're sitting on substantial savings but won't spend $300 in preventive health care or $50 in dinner with loved ones, you're thinking Question n T Are you avoiding spending money on t I'm talking about professional development courses, certifications, industry conferences, or networking events. Maybe it's that $500 coding course that could lead to a $20,000 dollar increase, or the $200 software that could save you 10 hours a week and make you more productive. Or it's a $1000 conference where you can meet your next client or employer. Some people will sit on $100,000 in savings but will not spend $1000 in professional development. In my book, that's backwards t Smart savers understand that investing in their skills, career, or network often provides the Sometimes 10 times, 20 times, or even 50 times returns. Question n T Money should provide peace of mind but for over-savers, it often creates the opposite. Are you constantly worried about spending anyt Do you feel guilty about every purchase even necessary once? Are you losing sleep calculating opportunity costs of small expenses? I've seen people with $200,000 in savings who feel anxious about spending $50 in dinner with friends. That is not financial security, that is financial anxiety disorder. And research shows that people who experience financial anxiety often have worse health outcomes, strange relations If your pursuit of financial security is making you feel insecure, you've crossed into the over-saving territory. Understand that money should provide you a peace of mind, not create anxiety. Thank If you want to learn some other extreme money obsessions that might be keeping you poor, please check out my video here. Until next time, all the best.