Why Save Money If You Never Spend It? The Truth About Financial Literacy

Imagine this: You work hard your entire life, save every extra rupee, cut corners, and sacrifice fun experiences—only to leave behind a big bank balance that you never got to use. Sounds strange, right?

Well, here’s a shocking fact: As of 2019, around ₹18,830 crore was lying unclaimed in Indian banks! That’s money that people saved but never used or passed on to anyone.

Why do people save money if they’re too scared to spend it? And why do some people spend everything and save nothing? Let’s break this down in a way that even a school student can understand!

The Two Extreme Money Habits: Overspending vs. Over-Saving

Most people fall into one of these two categories:

1. The Spenders – They live paycheck to paycheck, spending money as soon as they get it. New phone? Bought. Expensive dinner? Done. But when an emergency comes—oops, no savings!

2. The Hoarders – They save like crazy, scared to spend a single rupee. They might live frugally, never enjoy their earnings, and sometimes even die with a huge bank balance they never touched.

Neither of these is smart. The key is to spend wisely and save smartly. But here’s the problem: Most people don’t know how to do that.

The Real Problem: Nobody Teaches Us About Money!

In school, we learn math—like how to calculate interest. But do we learn how to manage our salary? Nope.

Most people grow up without any financial knowledge. They don’t know how to:

• Save and invest properly
• Avoid debt traps (like credit cards and loans)
• Plan for big goals like retirement, buying a house, or traveling

Result? They either:

• Spend too much and struggle later, or
• Save too much and never enjoy their money.

What’s the Solution? Financial Literacy!

Understanding money isn’t just for bankers or investors. It’s for everyone—even kids in school! Here are some super simple financial tips to follow:

1️⃣ Learn to Budget (a Fancy Word for Planning Your Money)

Think of money like a tiffin box. If you finish all your snacks in the first period, you’ll be hungry later! Budgeting means dividing your money wisely—some for now, some for later.

Example: If you earn ₹50,000 a month, you can divide it like this:

• 50% (₹25,000) – Basic needs (rent, food, bills)
• 30% (₹15,000) – Wants (shopping, fun, travel)
• 20% (₹10,000) – Savings & investments (for future goals)

2️⃣ Save, But Also Invest!

Saving is good, but keeping money in a savings account won’t make it grow. Instead, invest it! Even small amounts can turn big over time.

Example: If you invest ₹5,000 every month in a mutual fund, in 10 years, it can become ₹12–15 lakh! That’s the magic of investing.

3️⃣ Avoid Bad Debt (Credit Cards & Loans)

If you borrow money for unnecessary things (like the latest iPhone when your old one works fine), you’ll be in trouble. Debt should be for important things like education or a house.

Example: If you take a loan of ₹1 lakh at 10% interest, you’ll have to pay back ₹1.1 lakh. That extra ₹10,000 is just for borrowing!

4️⃣ Set Short-Term & Long-Term Goals

Goals help you save with a purpose. Don’t just save blindly—know why you’re saving!

• Short-term goals: New phone, vacation, laptop
• Long-term goals: House, car, retirement, child’s education

5️⃣ Get Insurance (Because Life is Unpredictable)

Imagine you fall sick and hospital bills cost ₹3 lakh. If you have health insurance, you won’t have to pay from your savings. Smart, right?

Financial Education Must Start in Schools

Today, many people don’t understand money. Only 24% of Indian adults are financially literate. That means most people don’t know how to:

• Save wisely
• Invest properly
• Manage loans and credit cards

Countries like Australia, Russia, and the US have started teaching financial literacy in schools. But India still has a long way to go. Until then, you can start learning on your own!

The Bottom Line: Balance is Key!

Money isn’t just for saving or just for spending—it’s for living.

• Don’t be scared to spend on things that make you happy.
• But also don’t be careless with money.
• Learn to balance saving, investing, and spending wisely.

What do you think? Do schools need to teach financial literacy? Have you ever saved too much or spent too much? Drop a comment below and let’s discuss!