Why I Don’t Like The Word Saving

Americans have a well-documented problem with saving. The average personal savings rate (according to data from the St Louis Fed), is almost back down to levels seen just prior to the real estate bubble bursting and subsequent stock market crash of 2008-2009. Here’s what the average personal savings rate has looked like in the US (on a monthly basis) from 1959.

Amazing, isn’t it? Even with the horrible recession, the personal savings rate bounced only back up to levels last seen in the early 90’s.

Now, I’m not an economist (though I have a friend who is one if that earns me any economic street cred), and I’m sure there are plenty of systemic reasons that have contributed to the drop in personal savings rates. This Room For Debate piece from the NYT back in 2011 discusses a few different reasons, like the lack of pensions, stagnation of the median income and the lack of enough tax incentive to save. These might all be perfectly valid arguments – I don’t have the desire or economic policy know-how to really say one way or another.

But I think there’s something more subtle going on that affects us all on a more personal level – vocabulary.


I know, you probably haven’t had a vocab test since middle school, but luckily the vocabulary I want to talk about today is deceptively simple. Just one word, in fact. Saving.

I don’t like the word. You could even say I have beef with the word “saving”. It’s imprecise, and as a math person, imprecision annoys me. But I can deal with imprecision. It’s the fact that the two accepted definitions and usages of the word “save” have nearly opposite intent that bothers me the most.

Let’s look at the two meanings.


Defn 1 – To add money to your accumulated holdings. “I earned $10 last month and spent $9. I saved $1 this month!”

Defn 2 – To not spend as much as you theoretically could have. “These jeans were marked down from $90 to $89! I saved $1!”

So in definition 1, your bank account grows. It’s about safety and security and planning for some unknown future. This is my grandmother’s definition of what it means to save. And my definition of choice.

But what about definition 2?


There are a few reasons that I don’t like definition #2

First, in definition 2, your bank account shrinks. That’s the exact opposite of definition 1. You have to spend to get the kind of “savings” in definition 2, and the common marketing slogan “the more you spend the more you save” starts to smell a lot like the lottery’s famous theme, “You have to play to win!” [See one of my favorite xkcd comics for a great visual example.]

What definition 2 is really about is discounts. But the idea of a discount is based on the fact that there is some fixed price that is the value of an item. But if we’ve learned anything from Warren Buffet it’s that Price ≠ Value.

So price is a bad way to measure a discount (and inherently “savings”) to start with, and it only gets worse when you consider how easy a reference price is to manipulate these days. From just a quick search, here are just a few companies accused of price inflation to increase the appearance of discounts:  Gilt GroupeKohls,JC Penney and Overstock,Groupon and Living Social.

And lastly, definition 2 is dangerous because its ill effects are repeatable. You can get the same $10 savings (discount) multiple times, but all you’ve done is increased the number of spending occasions (and the amount you’ve spent.) Contrast with how many times you can deposit the same $10 bill into a savings account – once. There’s no tricking yourself that you’ve doubled your savings because you can only do it once for each savings amount.


Not Incorrect, But…

The dictionary says these are both valid ways to use the word save, so our old Language Arts teachers can’t be upset with us for mis-speaking. But the fact remains that by using the same word, we are (as a society) a bit in danger of conflating the two ideas. And that is a disservice to ourselves.

So my new challenge to myself (and to anyone else who wants to take it) is to remove definition #2 from my lexicon and focus on definition #1 alone.  I want to eliminate spending from my mind when it comes to saving.


Who’s with me on my boycott of definition #2? Any other multi-definition words that get us into trouble?

And does anyone know if this is unique to English or if other languages have two separate words? (I think German uses the root sparen for both definitions… Pauline – how about French? Ivy – your native tongue?)

64 comments to Why I Don’t Like The Word Saving

  • I don’t like definition #2 either because you can use it to justify almost any purchase…even if you didn’t need it. If you bought nearly *anything* on sale, you are technically “saving,” right?

    Holly@ClubThrifty recently posted..Retirement Planning: 3 Tips to Get StartedMy Profile

  • Its a grammatical disaster, you’re right! It all comes down to what your baseline is. My friend pays for HBO and other premium channels and justifys it by saying he’d otherwise be out at a bar wasting money, so therefore he’s “saving” money by watching TV. I agree with you, if the money isn’t actually being put in a saving account, its not being saved.
    CashRebel recently posted..One More Way To Be Green, Frugal And EfficientMy Profile

    • I know. It’s like saying I saved money by flying 1st class since I theoretically could have chartered a jet. (Neither is true for us, of course!).

  • I promise to save my use of save for definition #1!

    In high school we had to take a consumer finance class. I remember our instructor hammering this home. We aren’t actually saving any money when we buy something on sale. We’re still spending whatever the price tag states.
    AverageJoe recently posted..Is It Time To Fire Your Advisor?My Profile

    • I think that class would have been useful for a lot of people. Too bad those kinds of courses aren’t really offered much anymore.

  • Great point. You definitely hear people brag all the time about “saving” money on a purchase, which is great if it’s something you actually needed but destructive if you’re doing it just for the deal.
    Matt Becker recently posted..How to Beat 80% of Investors With 1% of the EffortMy Profile

  • The only way I can see definition 2 being valid and comparable would be if the purchase was for a necessity and you then actually put that discount into your savings.

    I wish we had a consumer finance class in high school. That would have been a big help to getting my act together as soon as possible rather than just stumbling through it. Luckily I never really went into debt so it wasn’t a big issue.
    JC @ Passive-Income-Pursuit recently posted..Net Worth Update – June 2013My Profile

    • There are apps that allow you to “impulse save”, so if you got a $5 discount, you could immediately transfer that to a savings account. I might allow an exception for defn 2 for that case. =).

  • I’ve never really thought about it that way! Great post. I try only save as it refers to definition #1!
    Cat Alford (@BudgetBlonde) recently posted..Building A Blog Brand 101My Profile

  • I can see the problem with definition #2. I guess it might be more accurate to use the term discount. As in “I got a $1 discount on these jeans.” It doesn’t have any connotations about what you did with the $1, or if you ever had it in the first place. Only that you didn’t spend the full or expected price.
    My Financial Independence Journey recently posted..Emerson Electric (EMR) Dividend Stock AnalysisMy Profile

  • I have a blog post in the works that deals with the same semantics of the word save. It’s a tricky thing: it’s like we use the same word to talk about investing and also about cost avoidance.
    Done by Forty recently posted..When it’s Hot, Go SlowMy Profile

  • I like your grandmother’s definition the best.

    Savings is about security and preparation for an unknown future.

    My wife and I set up savings accounts for both of our (now) teenage boys.

    They are more into instant gratification than saving their money in the bank, but we have asked them (i.e., forced them) to put a percentage of money they make into their savings account. Like when they get a lot of money for their bithday.

    Someday, when they want to buy a car or a computer of their own, they may appreciate that money. When they complain, I tell them that I am helping out the future person that they will be, and not the present one that I see standing before me. The future person will thank us.

    “Yeah, right,” they say.
    Terry recently posted..“Turn Your Home into a Rental House” to be topic on “The Morning Blend”My Profile

    • Oh I think they will appreciate it. Give it another few years when they want to go on a class senior trip or something. They’ll appreciate having the money to do so then!

  • I’m totally with you. I’ve already started using “spending less” instead of “saving” for #2 uses. I also would like some way to differentiate between saving-for-spending in our targeted savings accounts and saving for the long-term – perhaps I should be using “investing” for the latter?
    Emily @ evolvingPF recently posted..Is “Live Like a College Student” Good Advice?My Profile

    • I like the distinction between investing and short-term savings, too! I often find myself using “set aside” for money that will be spent rather than invested.

  • I am an economist…

    My definition of saving is actually even broader than #1. It encompasses spending as negative saving. (Defn #2 there would be counted as spending or “negative saving” in my jargon.)
    nicoleandmaggie recently posted..Facts, opinions, empirical questionsMy Profile

    • Yay for the dismal science! If you don’t mind me asking – what is your formal definition? Or is it too complicated for a comment section?

      • Oh, I don’t have a textbook definition off the top of my head. But savings are accumulated wealth, and that wealth can be positive or negative. I guess technically when I think of savings, that’s your stock of money (which would be the positive or negative amount that you have). Then the verb “saving” would be the flow of money (what you’re adding or subtracting), which, again, could be positive or negative.
        nicoleandmaggie recently posted..Ask the grumpies: Present for a new TT prof?My Profile

  • I do both. I save money on purchases by comparing prices and I save money in my accounts by transferring paycheck to retirement, etc.
    I don’t like definition #2. We should be living a spending less lifestyle. But most people think they deserve an awesome, super expensive lifestyle.
    SavvyFinancialLatina recently posted..The Home Search BeginsMy Profile

  • This is an awesome point that I’ve never thought of. My favorite is when people talk about how much they “saved” on groceries or clothes by using coupons. This isn’t bad, but you’re actually spending money, not saving it. I’ll all for boycotting definition #2.
    Jake @ Common Cents Wealth recently posted..We’re Debt FREE!!My Profile

  • That’s funny you mentioned #2, because my friend posted a receipt on FB about how she “saved” 82% of what she bought. I did think to myself that was misleading since she still bought stuff, and this post pretty much explains that whole concept. I’m down with boycotting #2 and opting to use discounted instead, great point!
    anna recently posted..Wedding Stuff Part 1: Church CeremonyMy Profile

  • Oh boy, the name of my blog must be awful then! All joking aside, I like definition 1 as well. When I go to the grocery store and they happily tell me I saved X amount on my purchase, I just think, “Okay, but I just spent a lot!” I don’t think of it in terms of saving money because I don’t buy things that aren’t on sale anyway. I’d rather use the word discount as well.

    As for the name of my blog, I mostly mean it in terms of saving up for the future – spending less, earning more, investing, etc. I’ve never really thought of it this way though. Thanks for the interesting point of view!
    E.M. recently posted..The Experience of Being A BridesmaidMy Profile

  • lol I love how strongly you feel about the word. I never really thought about it like that, but I have to say I do get aggravated when I see commercials about how much you’re “saving” on a new car, or appliances, or a bed, etc. Basically on stuff that isn’t necessary. Now if I’m saving on let’s say almond milk (because I buy it no matter what) then I’m pretty happy. But it’s a little like coupons. I ignore most of them because it’s for stuff I don’t need to buy. Like grocery store coupons for boxed macaroni. There never seems to be a coupon for broccoli. So in that regard I know what you mean!
    Budget and the Beach recently posted..My BudgetMy Profile

  • Debbie M

    I use definition #2 only when I have a personal reference price and it refers to something I had planned to buy at my reference price or was willing to buy at my reference price if I couldn’t find a better one.

    For example, if I normally eat half a pop-tart for a snack on most work days, but then I switch to eating one graham cracker it’s easy to calculate the savings. And if now I normally buy generic graham crackers for $2 but get name-brand $3 crackers half-off, I say that I saved $0.50, not $1.50.

    In other words, I use definition #2 when it translates to definition #1.

    I don’t even really understand definition #1. For example, if I’m saving for a vacation, I call that saving–if I decide not to take the vacation, I still have the money. If I’m saving for my annual property tax bill, that’s not really saving. So long as I own that house, I’m owing more and more property taxes, so I’m spending that money even if it isn’t due just yet. That’s really more of a cash-flow issue than a savings issue. (Unless I would have gone into debt to make that payment otherwise, in which case I’m still only saving the interest, not the full amount.)

    I guess the official definition of my personal savings rate means that it’s highly variable: negative in the month that my property taxes are paid and amazing in any month when I get some sort of windfall, even if my lifestyle has been constant over that period. So that seems weird to me, too. The only good thing is that it lets people give you some information without telling you their income (which is taboo!). Also, they sort of let you compare people with different incomes.

    Another problem is that not all savings are alike depending what you do with them. Some are not as large as they appear (things like CDs and retirement funds may be subject to a penalty if you don’t save them long enough). Some are risky (such as loans to certain family members). Some could expand greatly (successful investments). And some savings just don’t work at all (recently heard about a dog trying to save an ice cube for later by burying it).

    • Hah, I jut had to laugh about the dog and the ice cube! Reminds me of a cat we know that “saves” dead lizards to play with later by hiding them under throw rugs.

      But your comment is spot on. Personal reference points are essential for measuring discounts, and even investments in the future are not always guaranteed.

  • I love this perspective – I’m fully in support in boycotting definition #2! It’s a completely misleading concept!

  • That slogan is a standard trick of all marketeers. I think they even teach it in school. And it is amazing how many dumb people consider it true and valid way of saving.
    Martin recently posted..Do you want dividend investing and do not know how to start?My Profile

  • I guess there is saving money and then there is saving money. If I want my money to grow that would be saving money but if I’m shopping and buy something that is on sale then I’m saving money, but are we really. There was some talk about this in one of my posts about knowing your prices and why it’s imperative to buy at the best available price. The problem is you don’t see the money you are saving it’s just a figment of your imagination. With number one you see the money grow.At least that’s how I see it.
    Canadianbudgetbinder recently posted..June 2013 net worth update: Everything is not lost (+0.09%)My Profile

    • Knowing your prices is a huge deal, and I’m glad you stress it so much in your grocery posts. That reference point is essential.

  • […] last but not least, Planting Our Pennies wrote about the various definitions of the word […]

  • Debi

    This is the first time I’ve been to your site. I love the tone of your writing and the content. I have limited time in the day to read blogs and GRS does not have the content it used to so it looks like I may have found a new “home”.

    I agree completely. Strike definition 2 from the dictionary. It’s strictly a marketing term and should be described as such.

  • Anne

    I think #2 can sometimes be accurate (#1 always is!), but only if the purchase is a necessity. If I buy trash bags at a bulk store, it saves me $ over buying them at target/grocery store, and since I HAVE to buy trash bags, the savings is real. Senior year of college when I needed a suit to interview in, I paid a pretty penny for one that fit well- if it had been on clearance that savings would have been real since I was willing to pay more for something that important. But when you use #2 to justify buying things you don’t actually need, you’re just buying a ticket to a smaller bank balance.

    • “Buying a ticket to a smaller bank balance”. I like it! Might have to say that to myself every once in a while as a reminder, too!

  • Mrs. Pop and there is the problem with why so many people are broke and in debt. They in fact think that correct way to define save as definition 2. People justify spending money on something that is on sale as saving money all the time. But in reality to save meant you never bought it in the first place and instead put it into your account. A friend called me two weeks ago about saving $500 on a TV. I made the mistake of asking what did he do with the money. He said what F’ing money. I said the $500 you saved, did you put it in the bank? Hhhmmmmmm no the TV was on sale for $500 less than it was a couple of months again so I saved on the cost. He needs to read this most so I can stop calling him a big dummy!
    Thomas | Your Daily Finance recently posted..Real Estate Investing How Do I StartMy Profile

  • I never thought of saving in this way. It makes sense though as the only way to truly save is by not spending money and not just thinking that you are getting a deal. Good food for thought!
    Debt and the Girl recently posted..Random Non-PF Related Post: I Want A Pet SlothMy Profile

  • We do have two words, épargner which is saving and can be used for a person to say I will save you the trouble for example, as well as a savings account, and économiser which roots in economy when you find a bargain and economize your money. People tend to use the later sometimes to talk about saving money on their account but the first one is only when you squirrel money away, not because you spent $3,000 on a $3,100 dress.
    I agree that you don’t save anything when you spend something, at most you bought a bargain. I also don’t like hotels that provide “free wifi and free breakfast”. It is not free, it is built up in the rate you paid.
    Pauline recently posted..Early retirement in the US vs abroadMy Profile

    • Thanks for the language lesson! I think it’s cool that French has two completely separate words, where English and German uses the same root for both meanings. Do you think the French are less likely to view discounts as “saving” as a result?

  • My mom (and practically most of my relatives) are huuuuge fans of definition #2! It’s what justifies her shopping sprees at Ross, Marshall’s, Kohl’s, etc. “Look, I’m saving 50% on this dress!” Yeah? But you’re still spending the other 50%.

    I’m with you on this boycott!
    Lisa E. @ Lisa Vs. The Loans recently posted..A Quick FavorMy Profile

    • Exactly! Kohls gets me because they’re been accused of marking prices up prior to sales, too! So your discounts really aren’t even as big as they seem, either!

  • trudy

    If people don’t have jobs, they can’t save. Even if the employment rate inches up a bit, a lot of that is people who were formerly full time employed now part time employed, or people just wearing out and giving up ups the employment rate since the number of job seekers drops.

    • Jobs definitely make a difference. But what concerns me about the US savings rate is that it’s decreasing even as the unemployment rate is dropping. I hope that doesn’t mean people are over extending themselves as they get jobs again.

  • I think the #2 definition is valid however we have to be careful how we use it. For example saving money on a useless items means you spent money not saved. Also those levels of savings are pretty astonishing. We are a society driven by debt and consumerism.
    Kevin Watts recently posted..How to Avoid Student Loan Wage GarnishmentMy Profile

  • Fully agree with your Def #2 and #1 and def #1 is exactly about more you save is more you earn but for def #2 it is worth only when you have planned budget such as wedding and you save some bucks because of deals. Basically savings on planned budget is good but getting away with savings on buying unplanned stuffs mainly due to impulse shopping is just getting fooled by marketing gimmicks
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  • They say that a penny saved is a penny earned, but you do make a really good point here. Being “thrifty” is not the same thing is saving up for a rainy day, and it really can lead to backwards thinking. Great post and thought.
    jefferson @SDR recently posted..Ten Reasons Why I Love Our New NeigborhoodMy Profile

  • […] so intense about her budget for her husband’s sake. Mrs. Pop from Planting Our Pennies doesn’t like the word ‘saving’ because of its ambiguous definition – and neither do I!  I’m trying to say/write […]