Is Saving Money Important? The Cons of Saving Too Much

This article is an excerpt from the Shortform book guide to "Die With Zero" by Bill Perkins. Shortform has the world's best summaries and analyses of books you should be reading.

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Is saving money important? What are the cons of saving money? When can saving money actually cause problems?

Author Bill Perkins argues that saving money isn’t always the best financial plan. In his book Die With Zero, he claims that saving money is important when you use that money for enriching life experiences or to further your relationships with others, however, saving just to save is unwise.

Read on to learn why Perkins says saving money isn’t as important as most people think.

Is Saving Money Important? Perkins Explains

Is saving money important? It’s a question that hedge-fund manager and energy trader Bill Perkins explores in his book, Die With Zero. In a nutshell, he explains that saving money you’ll never spend isn’t a good idea because it means you’re sacrificing the value that money could have added to your life. In this article, we’ll discuss why Perkins says saving money is only important when you actually intend to use it and why saving for the sake of saving shouldn’t be your default financial plan.

Saving Money Might Be Costing You Experiences and Relationships

In his book, Perkins questions whether it is really important to save as much money as possible for the sake of saving. He advises you to ask yourself whether the money you’re saving from your job is worth what you’re giving up to save it. This sacrifice might be the hours you could have spent doing something you enjoy more than working or the money you could have spent on an enriching experience or humane cause. 

For example, suppose you’re working a high-paying job that allows you to save lots of money but makes you miserable or causes you to miss out on the experiences you’d like to have. In that case, it might be worth considering a different job that pays less but leaves you more time to enjoy yourself.   

(Shortform note: The authors of Your Money or Your Life adopt a similar perspective on money but ask you to apply it in a different way. Instead of thinking about what you’re giving up in life experiences to make money, they ask you to think about what you’re giving up in life experiences when you spend money. For instance, ask yourself if the new clothing you want to buy is worth the four hours of life energy you gave up to earn the money for it. Both approaches will likely lead you to make choices that result in a more fulfilling life.)

To help you consider how important saving money is to you, another way Perkins suggests thinking about it is that you want to balance saving money and accruing new experiences so that your savings account doesn’t continue to grow while your balances of rich experiences and important relationships stagnate.

(Shortform note: Perkins recognizes that all of his advice on whether saving money is important, and his advice on work-life balance in particular, is geared toward readers in a privileged financial position. He concedes that working fewer hours to have more time to enjoy life isn’t an option for many people. Indeed, in 2023, over 400,000 Americans work two full-time jobs and 60% of Americans live paycheck to paycheck. Still, he might argue that his recommendation on maintaining a balance between “living life” and saving money can probably apply to anyone—it’s just that finding the point of balance will be different depending on how much money you have.)

Money Can Advance Causes and Relationships You Care About

Refraining from saving money also lets you use it to help others. Perkins explains that most people save money to pass down to their family members, charities, or other organizations they care about in their will. However, he argues that, while saving money is important when you intend to pass it on to loved ones or to advance a cause, waiting until your death to do this isn’t necessarily in anyone’s best interest: What’s more helpful, he argues, is to give money to others earlier, when they can benefit from it more. Waiting to give away your money until after your death might mean missing the opportunity to put your money to its ‘best’ use. Therefore, even if you’re saving money to give to others, your goal should still be to have no funds left at the end of your life.

For example, say you’re saving money to give to your adult child in your will. She currently wants to go back to school and make a career change but has been putting it off to pay for childcare for her children. Perkins would likely argue that you should give your daughter the money now, when she’s struggling and a financial boost could be life-changing. If you wait until your death, she’s likely to have either figured things out herself or had to make painful sacrifices.   

Perkins suggests that the optimal time to give money to your kids is when they’re between the ages of 26 and 35. At that point, they’re likely to still need the money and will hopefully put it to responsible use.

(Shortform note: Perkins’s recommendation to give money to young loved ones when they need it most, not at the end of your life, could be seen as reinforcing the dependence of millennials and Gen Zers on their parents. A study shows that one out of three millennials and Gen Zers is still financially dependent on their parents. However, millennials are generally viewed as having worse financial prospects than older generations, so perhaps investing in them at an earlier stage of their lives could be seen as leveling the playing field.)  

Is Saving Money Important? The Cons of Saving Too Much

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Like what you just read? Read the rest of the world's best book summary and analysis of Bill Perkins's "Die With Zero" at Shortform.

Here's what you'll find in our full Die With Zero summary:

  • Why your goal in life should be to die with zero dollars in your bank account
  • Why you should use your money to the fullest, instead of saving it all
  • How to maximize enriching experiences throughout your life

Emily Kitazawa

Emily found her love of reading and writing at a young age, learning to enjoy these activities thanks to being taught them by her mom—Goodnight Moon will forever be a favorite. As a young adult, Emily graduated with her English degree, specializing in Creative Writing and TEFL (Teaching English as a Foreign Language), from the University of Central Florida. She later earned her master’s degree in Higher Education from Pennsylvania State University. Emily loves reading fiction, especially modern Japanese, historical, crime, and philosophical fiction. Her personal writing is inspired by observations of people and nature.

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