by Tommy Koh

Created on: February 27, 2009   Last Updated: March 03, 2009

To spend or to save has always been a touchy topic to all.

To many, or should i say for modern city dwellers and westernised cultures. I would dare say that saving is definitely harder to do than to spend.

Taking myself as an example, with $100 in my wallet, within the day, it will be gone either buying myself some good food or nice clothing to bring out the best in my dressing. It barely goes through my mind that I should move down to the nearest cash deposit or bank to save up whatever I have with me.

Environment:

For many in our current society, we are born into an affluent society where we were taught that status and material belongings are what matter (which might not be true). And to bring this factors out clearly, people tend to use material objects or even paper assets to beef up what we are truly worth. Very few of us will actually want to maintain our net-worth through holding them as cash in our banks, or even under the pillows. And with the benefits of having assets that may eventually grow, people look into spending to increase their wealth as discussed in the next point.

Investment:

People are greedy and adventurous by nature, thus when given a choice of having to take a risk in investing in some high returns, yet high risk assets as compared to the low returns, and in turn, low risk savings in commercial deposit accounts, many will choose the former. It's not difficult to tell which is harder. To save them in the sense of bank SAVINGS or to invest them out, which is indirectly spending the money on certain assets. The fact is that oppurtunity costs are involved, even though one may know that saving is an assured win-win situation for them; they would not want to miss out the on the time where they could actually reap a certain amount of indirect profits from the choice they make, which is to invest in something of higher returns.

Credit:

And lastly, with the many innovations and improvements in the financial structures of our time, credit has never been easier to acquire, especially with the spread of the usage of credit cards and close to zero interest loans. People are tempted to SPEND money that they have not even acquired. Such future money is spent before it is even added to their accounts. People who own credit cards, ranging from Mastercard to Visa to Amex, do not only own ONE card, but they will usually apply for MANY to tap on the vast credit that they could actually acquire; as such, SPENDING much more than they eventually earn or SAVE. With ease and not physically seeing the money flow from your account to the recipient's, people spend without thinking and thus it is so much easier to spend.

Even in time of bad economy and possibly recession that may be coming up, with the environment and upbringing of people being consistent as the economy can barely change that, such influence on our nature of spending more than we save which also indicates that it is easier to actually spend than save, I believe it is harder to save. And with the ever changing forms of investment types, ranging from paper to real assets, it opens even more choices for people to take advantage of to SPEND their hard earned cash. And last but not least, with credit still being issued to people who do have good credit ratings, the turn of the tide from spending to saving might not be existent for awhile.

Therefore, I shall conclude that SAVING is harder than SPENDING.

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