The theme this week on the One Minute Retirement Tip podcast is: Are You A Money Hoarder? 

Today, I’m talking about the distinction between saving and hoarding money. According to an article in Smart Capital Mind by Malcolm Tatum: “While the lines between [saving & hoarding] may at times appear somewhat fine, there is one important distinction that revolves around the intent or reason for the accumulation of financial reserves. 

Depending on the reason for that accumulation, the activity may be considered responsible and productive, or be extremely detrimental to the well-being of the individual or family involved.”

Here’s the distinction according to Tatum: “When saving money, there is normally a specific purpose or intent in mind.” Maybe you’re saving up for a vacation, for emergencies, and upcoming car purchase or home purchase...if you’re listening to this podcast, then you’re obviously interested in saving for your retirement.. The point here with saving is that you’re saving for a specific reason. The saving has a purpose. It’s the responsible thing to do. 

“In contrast, according to Tatum, “hoarding money has no other purpose than to accumulate financial resources. There is no intended goal for the funds that are set aside, and no plans to make use of the money at some future point in time. People who engage in hoarding money will often forgo necessities in order to add a little more to their savings account.”

An important tell-tale is the person who saves far beyond what is enough for a comfortable retirement, hates their job, but continues working anyways, all in the name of saving more for retirement. 

Another tell-tale sign is the person who forgoes necessities to save a little bit more. In an extreme scenario, it’s the person who saves 90% of their income, yet drives an unreliable and unsafe car. Doesn’t buy life insurance or health insurance, and would rather not eat anything on the day they forgot to bring their lunch to work, rather than spending any money on eating out. 

So if you save just to accumulate more with no specific purpose, or you have vastly oversaved, yet are still making tremendous sacrifices, then you might be a money hoarder. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance