Last weekend while waiting in the airport for my daughter a headline in the Irish Independent caught my eye. The print version said “More cash being stashed away as population ages.” Online it said: “How Irish people are stashing the cash more than ever as saving habit takes firm hold. Trend is still growing, with the amount of income put away by people now 15pc.”
This was very similar to a piece exactly a year ago which said: “Ireland’s money pile set to grow further due to ageing demographics. Households here have saved just over 14pc of their incomes in the last quarter.”
What the actual…… A money pile? People have money piles? This is news to me.
I went upstairs to my bedroom and opened a drawer. I couldn’t find any money pile. We do have a sock pile waiting to be put away, an absolutely massive Lego pile and a gargantuan shoe/runner/wellie pile, but a money pile? This has got to be some kind of joke, I decided.
I checked the small print on last year’s piece in the Indo. It said: “The pile of savings that Irish households are keeping in banks, already standing at over €156bn, is set to grow further as the population ages, a leading Central Bank economist has pointed out.
Households saved 14.1% of their incomes in the last quarter. The trend of putting away extra money began during Covid but has continued since, with the savings rate averaging around 14% since the middle of 2022.”
It also said, “the official definition of household savings includes buying assets such as new homes, paying off debts and paying into pensions, as well as putting money on deposit in banks. Central Bank figures show that households’ net deposits into banks in Q3 were up by €1.3bn.” Therefore this could mean (I’m not too clear) that the home I live in is a money pile. That seems strange to me, I like my home and feel lucky to live there but it isn’t a money pile. In fact it often – like the children – sucks up even more money from the ever decreasing teeny – tiny “money pile.”
This really did catch my eye though: “Looking at the working age charts, we expect more and more savings. An ageing population saves more.” Why? Why would an ageing population save more, this makes no sense. What nonsense is this?
Now I don’t want to encourage risky, irresponsible behaviour. Indeed I am not offering financial advice of any kind. I’m just thinking out loud. Saving is, I suppose, a good thing and I do have a small money pile for an absolute emergency, like desperate dire straits. But older people saving more makes no sense and I rely on Bill Perkins, who wrote the book Die With Zero as my authority for this.
If you don’t want to feel guilty about spending money, then this is the book for you. In this book Mr Perkins, who has a very substantial money pile, explains that older people saving money, is well stupid. That’s my word not his. It does not mean spending the kid’s inheritance (although you can do that if you wish) but if you are in that position for instance, try to give the money away sooner rather than later.
His basic premise is as follows: we are different people when we are older, past retirement than we are when younger. You have less energy and you are often content to just chill at home. Also you might not be in the good health you assume you will be at 70, when you are saving like a demon at 40. Some people – fools – think that they will learn to ski at 70. But the chances are you will not have the energy or health requirements at 70 to learn to ski. You’ll be happy enough to sit at home. Therefore if you can afford to, and it has been a lifelong dream of yours to ski, go and learn to ski.
Perkins would sometimes meet people in their mid 70s or even 80s, still saving. Like really saving serious amounts of money and he just could not understand this. Yes perhaps they were saving for the nursing home, which is responsible I guess, but he explained that still didn’t justify this level of saving.
I apply much of this to my life. Some parents say oh I will travel with the children when they are older or even worse I will wait until the children grow – up, leave home and I will travel with my husband in retirement. That’s a great plan until your husband drops dead with a heart attack – under pressure from the desire to save. Or worse, you get dementia and you can no longer take a trip to India. Heck, you can barely make it to your local coffee shop.
I have never been to India with the children but I have taken numerous trips to London and France with them. That’s because the children are only at a certain age once. There is simply no point in waiting. John is only 4 for one entire year of his life and mine therefore he will only enjoy the Natural History Museum or the Science Museum in a particular way of a 4 year old at that time. You can wait until he is 12 or 13 but it won’t be the same. And yes, children behave themselves when travelling, the entire airport and London underground experience is a learning experience.
Likewise the girls are only a certain age to enjoy Paris once. You can certainly go when they are older, as long as the blood cancer doesn’t get you or they don’t really want to go with you anymore. Am I being irresponsible in not providing properly for my old age? Maybe. But I doubt I will need much by then.
I suspect what will sustain me is not the big ‘money pile’ I have put in the bank for 20 years and has been destroyed by inflation, but the memories I have of travelling with the children when they were young.
I am not telling people to get all their ‘piles of cash’ out of the bank and spend it like Elton John in a flower shop. But I am telling you to perhaps read the book and if you are of a certain age ask yourself just what are you saving for. If you can get away on trips with children or grandchildren I think you should do it.
Anyway, happy Christmas one and all!