Our Savings Might Be Ficticious

Morning tea out on the verandah.

LET'S get straight to the point.....being a frugal shopper, a DIYer, a veggie gardener, a thrifty recycler, a super smart stockpiler, a home mechanic, a from-scratch cook, a capable sewer or a ride-your-bike-instead-of-driving devotee does not necessary make you any better off financially.

Let me explain.  I meet many folk who claim to be simple-living and saving money on this that and the other but are clearly still spinning their wheels financially. This is plainly evident by their reaction when I ask them what they did with the money they saved on a purchase - try this scenario for size:

Me: Hi Bruce! Hey nice suit - is it new?

Bruce: Yes it is new. You'd be proud of me....I got it 50% off. Saved myself $250. 

Me: Cool!  So what did you do with the $250 you saved Bruce?

Bruce:  Aaaahhh, oh, um, aaah, yeah, um

Me: Sorry Bruce...just razzin' you up. It's a great suit and a great bargain Sir....real nice cut. You're looking real sharp. (then I change the topic).

I let the chooks out at dusk to
have a 'supervised' peck around

You see, Bruce has not saved a blessed cent. Truth be told, he only bought the suit because it was on 50% special not because he needed it, so in fact he has wasted $250.   The paradox is he thinks he has saved $250.  The worst of it is that his finances are thus unreconciled to the tune of $500....yep.

So here is the straight up facts about buying bargains, saving money and being frugal:
Unless we take those savings and use them to either  put into a savings account as an extra savings payment, or, use them to pay against a consumer debt as an extra debt payment on top of what we would normally be paying down, then the savings we think we have made are just fictional and theoretical.



For so long we used to 'budget' when we shopped and enthuse over only spending X amount on groceries or getting cheap petrol or fixing the car ourselves......but never actually got around to putting those savings aside.  It was all theoretical talk.....and worse than that, as all the effort and thought we put into chasing bargains and frugal savings were wasted because we never took that vital final action - putting the savings in the bank or off our debt.  We were not Robinson Crusoe either - so many folks fail to take that last logical and vital step too and thus inextricably find themselves no better off despite their fine efforts to be frugal.

So the next time you save $20 on your grocery bill - bank the $20 the same day.
The next time you get petrol cheap - bank the $6 the same day.
The next time you get a discount - bank the difference the same day.
The next time you get your free coffee stamp after buying 9 others - bank the $4.50 the same day.

An exhilarating moment....

In all seriousness, unallocated monies due to frugal activity are the most easily misplaced and squandered monies. Every dollar must have a home. If you save a dollar - immediately give it a home....don't leave it laying around in your wallet or in your general expenses account.

Take care folks - stay nice.


After thought:  I guess this post is totally self evident for long-time skilled frugalistas and budgeters, however it was a hidden trap we fell into in our journey to turn around our finances and thus may just strike the right note for other folk working hard to curb spending but feeling they are not making headway. 


  1. Good advice there, Mr.HM. There are a couple of blogs I follow where a weekly list of money saved is posted. I am not sure if the equivalent is banked though as often it amounts to a lot of money.

  2. I'm just old enough to remember having a bank account, with a bank book. If you wanted money, you had to go into the bank and fill out a withdrawal slip. It made it more real, the act of withdrawing (and depositing) money.

    Then plastic started to get popular and people started to disassociate to their money. It became the means of doing something, rather than finding the balance of achieving money too. There are a lot of things we disassociate with, which makes saving money hard.

    But I still treat my bank account, like I did all those years ago with a bank book. The trick is to stop money going out, more than you put in. For those generations who never knew that experience, it must be challenging to learn balance.

  3. Sounds common sense but sometimes we just miss the point! I really enjoy your blog post... I believe that money management is an important issue these days. Keep us all inspired and encouraged with sharing your wisdom and knowledge Mr. HM:) Wishing you all things nice!

  4. Hi Phil. I can relate somewhat - it reminds me of my early days of trying to become frugal and be debt free. I remember telling myself that 2011 would be the year we paid off all our debt.
    But the years came and went, and it always seemed like we were never really getting ahead.
    Worse was when we found a bargain and used the credit card so that we didn't miss out on the 'savings' - over time I more than paid for the 'savings' in interest! So not really the bargain we thought.
    I look back on all that now in disbelief that I was so clueless about money. Better late than never, no?

  5. Another GREAT post. I sure wish this was being taught in schools, but of course the young ones are grand at thinking they'll start NEXT YEAR to save. Next year never comes for a lot of people, they just keep doing the same things over and over. I'm always grateful the lessons my parents taught me "stuck". Though I learned, I was never able to get my son to understand the importance of saving. Frustrating!

  6. Great thought provoking post once again Phil. Lately I've been selling a few things that we no longer want or need to help pay off the mortgage, and I've been strict about putting that money straight in the mortgage account. From past experience I've found if I don't it just gets swallowed up and disappears! Now you've got me thinking about putting these types of "savings" into it to.

  7. Ok that has given me something to think about and exactly how to carry it out I am not sure, maybe use the spare empty bank account and transfer what i actually saved into it.Your topics lately are certainly making sense and jolts me into thinking differently. I need to make that caramalised onion tart! Ruth.

  8. Rhondamargarita25 July 2016 at 13:16

    excellent post - one that I needed to hear, and will now be more aware of

  9. Great advice! I get so frustrated when friends tell me how much they have 'saved' on their new shoes/dress when they didn't need them in the first place.

  10. Hi Phil,

    We just bought our son a suit because we accidently ran into it at a Goodwill (resale) shop for $9.99. We thought it might need some minor alterations so we brought it to a seamstress who proclaimed the fit perfect other than a little reinforcing in the buttock area! My daughter also bought two blazer jackets as she will be doing an internship where dressing a bit more classy will be required. She got hers at Goodwill (with new price tags still hanging on the jackets!). Hers might need some altering but maybe not. I wonder how to calculate the savings on this!

    A good suit here is probably close to $875 bucks. We weren't intending to buy one so I probably won't put away into savings the difference. My son will need it to graduate this coming May and then hopefully job interviews.


  11. A point well made. What was that delicious looking tidbit you were having for lunch? Thanks for writing such great articles.

    1. Hi Sheila - the lunch was caramelised sweet onion tart with melted camenbert and parsley

  12. I really enjoyed this post Mr. HM. Many people see a bargain as something that they get for cheaper so then they can spend the surplus on something else. Whoopee more time shopping! My best savings tip is to stay away from the shops whether they be physical or on-line.

  13. Ah, "capturing" those elusive savings...well done sir!

  14. Okay Mr. HM, please clarify. I don't quite understand your theory here. Are you saying that if I paint my house and I say I've saved the $5000 it would have cost me to pay someone to do the job, I should be placing $5,000 in the bank?

    1. Yes - exactly. This is utterly important when we still have outstanding consumer debt or have not reached a level of savings we require. It is radical I know....but unless we have actually saved that money - then it is simply not savings. Call it something else. Unless we are conscious of doing this, then the $$ we save on x,y or z will just be frittered away on something else. The self-talk we apply must match the action. We either painted the house (using your example) and saved $5000 and there is that saved $5000 sitting in my savings account OR we painted the house ourselves and spent $5000 doing it - period. To be even more blunt - we tell ourselves and others financial lies and utterly misuse the word "save". The empirical evidence clearly shows our population in debt, not as savers.

    2. Okay, bear with me here... I suppose the way I look at it is that we have $5000 in our savings account and I did not spend it on painting the house, so the $5000 is saved, still in the account. Or, my husband would have paid someone $20 to cut our grass from the money that is sitting in our account. BUT, I cut the grass myself, so I look at it as $20 saved because I never took it out of the account. I look at it as I have saved the money because otherwise it would have been spent. Money in the bank is money 'saved', correct? Or if I buy a food item on sale, I look at it as the difference I did not spend, is SAVED in the bank. Just using caps for emphasis, not shouting at you.

    3. Okay Mr. HM, re-reading your comment here and now I understand, it is making sense (cents! ha!) now. I view savings as what I did not spend--and it is still in the bank. It will be used towards other needs.

  15. I actuality look at this differently. According to SS savings calculator I have bought items, food etc to the tune of over $8000.00. Most of these enhance my life because on NS of $303 since beginning of this year. I receive $300 per week and then I pay rent and without allthis free cheap food etc. my life would be pretty miserable. No I did not save it because its just not there. They do call it savings on the site but I know its not. Look forward to reading your blog as I just found it!��


Post a comment