My Husband Says Saving Money Is a ‘Waste.’ Is It?

Dear Kristin,

My husband and I started a joint checking account at the same time we got married. At the time, I also wanted to start a savings account together but he did not want to because he said that low interest rates of typical retail banking are a "waste.” 

Several years later, we do not have a savings account together. When we talk about it, he says things like "it's a waste" or "saving is pointless because we have student loans." I think saving is important, and have been trying to save on my own. How can saving be a waste? Should we let student loans prohibit us from planning for the future or emergencies? Am I tripping? 

Sincerely,

Nancy

Dear Nancy,

In a word, no. You’re not. I don’t disagree that at 0.17%, the interest rate on a regular savings account is abysmally low, but that’s no reason to avoid saving altogether. Here’s why: life is totally unpredictable. You could lose your job, or have a flat tire, or become ill. And if you have no savings, how exactly will you cover those costs? Emergencies can knock you into debt quickly if you aren’t prepared. The best way to prevent that is by having an emergency fund, so that even if something happens to you or your husband, you’ll both be able to cover them without suffering financially.

But saving isn’t just a good idea for times of calamity. Savings will also help you bring about positive moments in your life. Do you have financial goals? Perhaps buying a home, going on a vacation, or starting a new business. Maybe you want to buy each other special gifts for the holidays, or start a family. These things will all cost money and will inevitably require some form of savings to make them a reality. 

I suspect you already know this because you’re saving on your own, and I would encourage you to continue doing so. But you and your husband are a team, and you’ll probably need each other’s help to make some of these financial goals happen. So you need to convince your husband of the same.

He seems to be anxious about the student loans that you have, and it’s understandable why he’d like to focus his attention on eliminating that debt as fast as possible. But ask him about his contingency plans if things go south, or his strategy to achieve retirement, or buying a home without savings. While paying off debt is important, with a strong budget, you should be able to pay your student loans and save money at the same time. If you show him how much you could achieve with a budget, he might be more willing to participate in saving with you. What’s more, let him know that it’s easier to pay off debt when you have some cushion for any unexpected expenses.

Remember to stay calm during the conversation, but firm. The reality is that you will need to have some savings going forward or I fear you will be setting yourselves up for damaging financial risks. 

And don’t forget, there are high-yield savings accounts (HYS) to give you a greater interest rate, especially as the Federal Reserve continues to hike rates. Right now, you could earn as much as 3.50% interest rate on your account, which might persuade him to set some money aside for a rainy day.

-Kristin

Note: My Two Cents has evolved into Making Cents, but we’re still giving the same great advice, so be sure to submit any money questions you have for Kristin, and she may answer one in a future column.