It’s Not (Entirely) Our Fault That We Don’t Save

The Wall Street Journal insulted us last Saturday.

It was not an intentional or direct insult. It was an implicit insult put forward by quoting with approval the words of two experts. Still, I believe that the Wall Street Journal insulted middle-class workers seeking financial freedom early in life in an article from the edition published last Saturday entitled “Money Advice, by the Book.”

The article reports that the personal finance category is the third fastest growing category in the book publishing field. I find that encouraging news both for myself in particular as the publisher of a personal finance book and for the Retire Early movement in general, as it suggests that there are more middle-class workers all the time seeking out fresh ideas on how to manage their money.

I liked the article. But there was one argument put forward in it that I did not like. The article cited two experts in support of the proposition that personal finance is “basic stuff” and suggested that advice that is out of the norm should be viewed as suspect. The idea being advanced was that, once you know the cliches of personal finance, you know all that you really need to know.

The implication was that we don’t need to see too many more personal finance books published.

I don’t doubt that many of the recently published books in the field repeat the conventional wisdom and I agree that we don’t need more books doing that. However, I reject the idea that we don’t need fresh ideas on how to manage our money effectively. I can’t think of too many things that we need more of than fresh ideas on how to save.

We earn more money than did our parents and grandparents. We save less. Our inability to save is causing us stress and limiting our life options. We need books that teach us how to save effectively.

The conventional personal finance books do not do this. Like Linda Ronstadt did, I’m gonna say it again. The conventional personal finance books do not do this.

If the conventional advice worked, we wouldn’t have a saving problem. Right? The point of the existing books is to help us save. We don’t. So the books aren’t getting the job done. Right?

This is an important point. People are reluctant to call a spade a spade re this one. Most middle-class workers who do not save blame themselves rather than conclude that the conventional advice failed them. I think that the time has come to begin pointing the finger at the people who parrot the cliches without stopping to realize that these tired ideas have not been doing the job for years and years now.

It is time to try out some new ideas. The first step to doing that is acknowledging that the old ones have failed us.

The insult is in the suggestion that it is the middle-class workers who are failing to save who are failing to do the job rather than the money management approach they are using. If it were a small percentage of the population not saving, I could buy into the idea that it is the poor savers who are to blame. I have a hard time accepting the idea that 80 or 90 percent of us are so lacking in willpower that we cannot follow simple rules that would work if only we shaped up.

How many people do you know who save effectively? Do those people lack willpower in all areas of life? Or is it only in the saving area that they seem unable to behave responsibly?

When there are so many people who are successful in so many fields of endeavor who cannot get to first base in the saving game, does not that suggest that we need to make some changes in the saving game?

We don’t save enough. That’s clear. I don’t think it is entirely our fault. I think that a big part of the problem is that the conventional advice just does not make sense to most workers trying to plan for their financial futures in today’s economy.

The old money rules do not work. The Financial Freedom Community’s mission is to find out what does (we have made great progress in the first six years of our discussions, of course). The first step is to stop blaming ourselves for something that in most cases is to a large extent not our fault.