Why Do We Save?

Why Do We Save?

Great question.

Why do we save?

Why do you save?

I suspect many of us know our own respective answers that are at the heart of personal finance planning 101. 

What is a Financial Plan and what should it cover?

For us, I’ll remind readers (and myself! ha.) the reasons why we save in today’s post inspired by this Morningstar article and its sources below…

Why Do We Save?

For me/us, it’s for many reasons…I’ll get to those shortly. 

According to the article I found, recently on Reddit:

“u/SessionSmooth362 asked r/PersonalFinanceCanada about saving. They said they were, “Saving money but not sure what I am saving for” They explained that they are 26 and recently maxed out their TFSA with about $78,000 invested. The original poster (OP) then said, “Lately I have been thinking, “OK now what?”  

Interesting indeed, now what?

Here are some reasons from the article why people save and what objectives they are saving for:

  1. Build an emergency fund 
  2. Grow retirement investments/assets
  3. To pay for a big trip 
  4. Fund entertainment expenses (front-row at a concert/show) 
  5. Save money for a home downpayment 
  6. Pay for a new/replacement vehicle 
  7. Pay for a new/replacement phone 
  8. Pay for a new/replacement computer 
  9. To fund education (professional, fun (language, cooking)) 
  10. To spend money on hobbies 
  11. Pay for new/upgrading home furnishings (furniture, cookware, appliances) 

And the specific list of items goes on…

Why Do We Save?

I’ve answered this particular question in a few previous posts but it’s worth sharing in context with that Morningstar list above – why do we save, what have we saved for and what are we currently saving for. 

1. Emergency fund

For years and years we’ve kept our fund at this amount.

We keep this amount handy just in case we need it without tapping lines of credit and owing more debt.

It’s our cash buffer and sleep-at-night factor that’s personal. Your mileage may vary. 

We are also very likely to increase this cash position as semi-retirement is considered. Read on at the end for that post. 

2. Grow retirement investments/assets


We know to fund our semi-retirement needs and wants that income streams will be necessary from various accounts. In a nutshell, this is our plan for the coming years:

Part-time work + dividends = FIWOOT

We will need to work, at least part-time, to fund our lifestyle. This means, not working at all is not an option for us – we simply don’t have enough saved up to stop all work. 

We’ve estimated our annual spend will be in the range of $70,000 to $75,000, without debt payments, that includes both needs and wants. Our base expenses (food, shelter, clothing) are just over half of that. We don’t have too much flex on those items.

Income Needs and Wants in Retirement

We enjoy having a home to call “home base”. We aim to be debt-free soon.

3. To pay for a big trip

We love to travel and want to enjoy visiting different cities and countries around the world. We need money for that. 🙂

We don’t have a detailed travel budget, yet, but we’ll work on defining that over the coming years… It is our hope part-time work throughout our 50s will cover those travel wants. 

4. Fund entertaiment expenses

We pay for fun stuff now (today) and we’ll continue to do so, in the future! We enjoy experiences, going to local festivals, sporting events, etc. We need money for an Uber now and then too. 🙂

5. Save money for a home downpayment

Not applicable to us!

6. Pay for a new/replacement vehicle

We’re starting to save for a newer vehicle, now, and hope to pay cash for our next car in 2024 vs. borrowing lots of money to buy a depreciating asset.

7. Pay for a new/replacement phone

We don’t borrow money to buy our cellphones. I hope you don’t either?

8. Pay for a new/replacement computer

Just like our cellphones – see above – but I can appreciate some of these Reddit folks are millennials too.

9. To fund education

Super important to invest in yourself! This may or may not apply to us in semi-retirement although we hope to grow and learn on our own terms of course. 

10. To spend money on hobbies

I enjoy golf and cycling and walking/hiking throughout the year – except in the winter months! I will hopefully have more hobbies in semi-retirement too, time to learn and try new things. I intend to volunteer more. 

11. Pay for new/upgrading home furnishings

Since we enjoy having a home to call “home base”, it needs to be maintained. We have a line item in our existing and future semi-retirement budget for minor improvements and changes. 

Why Do We Save?

Not surprisingly from this list, but healthcare costs are non-existent from the Reddit list. That could be becuase younger generations believe that healthcare is free or maybe they feel they will live forever! Ha. 

Well, we’ve started to budget for that in semi-retirement too via healthcare premiums. 

Here is what to consider if/when healthcare workplace benefits are disappearing:

What to consider when workplace benefits are disappearing

Why Do We Save Summary

My list of why do we save could continue even further but this Reddit list from Morningstar was a nice starter. Consider your own “whys” behind why you save for other money management values.

Saving The Behavior Gap

Image courtesy of Behavior Gap.

I’ve often mentioned on this site it’s not your plan that’s important but its the process of planning (and re-planning) that will help you get you to where you want to go.

In that light, here are some closing reminders when it comes to any financial plan:

  1. Articulate your money goals. Find your money whys. Write them down and monitor them if you can. 
  2. Where possible, automate your savings for investment purposes – make savings automatic. 
  3. As often as possible for as long as possible, invest in lower-cost products to help you realize your money goals. If in doubt about what individual stocks to own, then consider index investing.

I hope this 1-2-3 actionable approach provides some insight into how I/we think and behave when it comes to our financial life. 

Thanks for reading.

Got questions or comments?  Share away!  I look forward to reading all of them.  

Related Reading:

How much cash should you keep?


What are you saving money for?


My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.

13 Responses to "Why Do We Save?"

  1. You know, Mark… I’ve been asking the same to myself for a while now.. and what I came up is

    – We save to spend! To spend when we need….. when we really need.
    – and while we know we need it in retirement, in emergency, for an impending expense… we also never know when a true unexpected emergency will come and wipe us out. at that time, we need the safety and security of the saved money to spend as needed.

    1. I like cash, some of it Kay, for those emergenices. Nice to spend as needed. Hard to quantify the sleep at night factor too!

      Thanks for your comment!

  2. Money always seems to never be enough. But in the end, we all leave some behind (sometimes too much which creates other problems!). At a certain point, you have to realize you have enough, quit your job, and buy yourself time and freedom. I’m so done with hoarding money only to buy more material things that end up in a landfill and that I really never needed. Time and good health are your true riches.

    1. Sal, well put.

      Time and health with your time, don’t have a price tag. Invaluable.

      I/we hope to get some more time back sometime in 2024…

      My best,

  3. I am at a stage in life where we don’t need to save anymore. But it is very difficult to get out of that mindset and I do a mental cost-benefit on all spending.
    I was always a saver since childhood. Later I was very influenced by the quote from ?? who said “every woman is just one man away from welfare” . I took that to heart and have never wanted to be dependent on a man’s income or money. So I saved for security.
    Over the past 8 months we had three separate one month trips, as well as a ten day to visit our son in the USA. Bought a new car last September and this week are having $30,000 worth of home maintenance done. Have the next two trips October-November and January to April planned out. Total eclipse of the sun! So I am trying to spend some. Just not frivolously.

    1. Barbara, awesome, that mindset has served you very well over the years and no doubt provided some luxuries in life now.

      It seems you are enjoying what you’ve earned – now 🙂

      1. One thing that is obvious to me in the personal finance space is how much easier it is to achieve financial independence and to retire slightly early if you marry well and if you earn a relatively high income. That was my story, but I know not everyone has those advantages and it’s nice that quality people like you are there to assist people in developing their financial plans. There is a lot of nonsense on the internet regarding finances and not nearly enough people like you offering wisdom.

        1. Steve, while I understand what you are saying, it still comes down to controlling spending. Plenty of high earning people have zero savings. Our daughter (a great saver since childhood–paper route, babysitting) works in the financial sector now and she has a lot of stories and insight. Kinda shocking.

        2. Totally echo that, folks with a higher household income have a great opportunity to save more but higher household income also comes with higher tastes/wants in life.

          I do find, like you, there are a boatload of folks developing courses and other garbage that have no experience in actually doing anything constructive. Easy to spot but still annoying 🙂

          Continued financial success to you. Your recent post was a good reminder life is precious.

          Take good care and enjoy your continued freedom.

  4. Hi Mark: Pretty simple really. We save for financial freedom as we want to enjoy the good things in life and not have to rely on the government. Health is also a reason. You could end up like me as they discovered my heart was racing so I had to go to emergency were they shocked my heart to bring it down to normal. Ever since then I have been extremely tired. Like Lloyd I am a bit of a hoarder also. My brother came and cleaned out the garage.

  5. hahaha…just mentioned to the wife this morning that we (as a couple) are hoarders. We have more stuff than we know what to do with or will ever use. I have built sheds (plural) just to store stuff!

    Probably an element of that in our financial lives. Room in the RRSP? Shovel in some cash. Room in the TFSA? Shovel in some cash. RESP? RDSP? You got it, shovel in some cash.


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