The numbers lie again, especially when talking about savings


About a year ago, I was writing the essay that follows. I kicked it around a bit, and eventually decided not to post it. The reason at the time was simple enough…

Near the end, I point out that the stuff that motivated me to start writing honestly had nothing to do with the emotions and thoughts that developed as I wrote it. The column I had read… I note it’s ok. Writer of the essay and publication it was part of… I don’t have much information about either, and no problems with them.

Reading that column just triggered something else in me because of some elements that stood out to me, and off I went.

So, when I was nearing the end stages with it, and didn’t want to post it, my essay was saved and put aside.

Until today.

Because today I had something brought to my attention that is so blindingly stupid that I am deliberately not linking you to the source of my aggravation. Heck, I even purposely went on a search engine mission to find it in several places just so I could step back and honestly say to you that “it’s out there if you want to look” while knowing you could easily be looking at a different piece and something that has nothing to do with what ticked me off (and yet fits the basic descriptions of it all the same).

Ready? Here we go…

You can save money by lowering the amount you tip.

(Yup. I know. Stay with me.)

The premise offered was that for nothing more than the sake of simplicity, most people are calculating gratuities all wrong. Seems people are leaving twenty-percent because it’s an easy calculation, when a minor change in looking at things would allow us to leave sixteen or seventeen percent, and that could add up to saving hundreds of dollars each year.

Why was I ticked off? Well, let’s start with the idea that essentially what this person was saying is built on a flow-chart approach starting with tips being discretionary leading to calculating them solely based on putting more money back in your wallet. And… wow. Just wow. See…

Yes, I was raised with the understanding that a tip is a discretionary offering. And while we could go into a huge discussion about what services should and shouldn’t be tipped, and what appropriate amounts would be, the bottom-line basic understanding most of us could build upon is: 15-20% is standard, with the 20% (or more) being for exceptional or extra efforts, and reduction based on poor service.

Again, absolutely, potential topic that has lots to consider. I’m not going to wander way off topic into a deep and thorough discussion about gratuities. Instead, I’m just… (my summary) “save more by lowering your tips by two to four percent”… wow.

And that in turn brought me back to this essay.

Is it a complete expression of ideas? Probably not. But it’s a start. A point to begin some conversations. And, hopefully, a moment where some awareness is raised when it comes to saying obviously stupid (and stupidly obvious) things.

Don’t view this as a finished trip for the idea. It’s not. It isn’t presented as a critique—though it has some flavors of such—as much as it’s meant to point out a few things around us.

Here’s the old essay, which does not include today’s events…

~ ~ ~ ~ ~

There are two things that I find myself rolling my eyes at quite often, and I’ve written about each on several occasions.

The first is that numbers lie. The concept here is not focusing on the math and whether two plus two equals four. Instead, when circumstances and situations aren’t clearly defined, results can be manufactured and manipulated by keeping elements out of the equations while presenting the results as if they are alarming and scary and undeniable facts.

And the second is that many people have a tendency to speak about situations as if everything in the world is predictable, equitable, and clearly defined. They do so with an arrogant smugness that borders on definitive insanity. As a simple summary (my words): “Everyone behaves like this, and if you don’t, you’re wrong.”

The amazing fun comes when these two concepts overlap and intertwine in a virtually unending tangle of stupidity.

Several days ago, I came across an article from Liz Smith and posted on a web site that I am unfamiliar with as an overall company or program, but falls under the name Business Insider.

(Disclosure… I looked up Business Insider. Been around for less than ten years. Interesting concept to have rattling in your head is that apparently the editor-in-chief is Henry Blodget, and one of his claims to fame is a permanent ban from the securities industry. A few complaints popped up in a variety of searches that detail how headlines for them are designed to attract visitors and not always matching the article content. (You know… clickbait and gossip-based… which is actually quite common and done all over the place, though still potentially a solid idea to have in mind for my essay here.) There are also many places that rate the site highly for the information it provides. So… cons and pros… but nothing that claims to be amazingly biased in the information it presents. Now… I promised you a fun overlap of materials…)

The idea of the article is built around savings accounts, and essentially providing a guide as to where your savings might be when compared to averages. And… in my reads… the article makes no sense.

Ok… yes… the article actually makes a great deal of sense. It provides balances and various averages and so on. It attempts to break things down by age. It even has a segment that notes income. So, there are some bullet-point ideas offered, and if you had a checklist you might think most of the bases are covered.

Trouble is, I’ve read the article a few times (which you should try to do whenever you plan to critique something), and I still have no idea what savings Smith is including in the research.

What do I mean? Well… for one thing… I haven’t found any notations about whether or not she is referring to or including retirement savings in any way. And now that I’ve mentioned such a subject, you might quickly realize that when it comes to savings the idea of retirement is one of those concepts that: (1) matters, and (2) often is addressed in ways separate from savings for rainy days and assorted other needs.

For many of us, savings fall into a few distinct areas. One would be money we have put aside for a purpose. A subsection here would be retirement, with another potential subsection being fun (travel and vacations, gift giving, etc.). Another area would be emergencies, where we have money set aside for car repairs, vet bills, and appliance replacement. A third could be simply that we have a few extra dollars. In this scenario, our bills, 401k contributions, and so on have all been covered from this week’s paycheck and the remainder is diverted off into that wonderful space where you’ll find a purpose for it later.

Yup. I’m simplifying things. But…

(1) Most studies suggest that the majority of Americans aren’t saving enough for retirement (if they’re even saving anything at all). With most of those most studies placing the number of people saving nothing for retirement at around twenty-percent.

(2) I think you can see where there is a huge difference between two savings accounts, each with a balance of $5,000, when: (account a) the entire amount set aside means everything including retirement, or, (account b) nothing to do with retirement since those monies are off in some 401k or such and not part of the balance, making it more of a rainy-day savings account.

In fairness to Smith, I don’t think this article is supposed to be about retirement or fancy accounts. I think it’s a straightforward “you have a regular bank, with personal checking and personal savings, and here is what the average person has in savings” article. The problem thus becomes based in option one from a moment ago. When one out of every five people is putting nothing toward retirement, and Smith’s article notes that the lower income groups may not have a savings account at all, the differences between general savings and retirement savings become a big old goose-egg. There’s not much of a difference between not having an account of any kind and having an account with a zero-balance.

What annoys me though is not that such an approach means that this article isn’t for everyone. (It’s not for everyone. And that becomes even more obvious when you start reading it and attempt a breakdown of how it applies to your situation.) The annoying part for me was how I found it to be pretending to be for everyone.

Smith has a summary at the end that advises reviewing your personal finances. One suggestion… eliminate unnecessary expenditures and be smarter about what you spend on purchases… is laughable. And the reason it’s laughable isn’t a criticism of Smith’s information, research or even advice there or anywhere else in the piece. It’s laughable because it doesn’t even register as a tough-love or breaking-new-information solution.

To save more I need to spend less? Wow… that one never occurred to me. (Bet it never occurred to you either. In other news, might I kindly suggest you might find you can pay off your credit card bills and mortgages and car loans more quickly by sending in larger monthly payments than the minimum payment due amount. (Ok. Fine. I’ll stop being a wiseass. Should I add some type of sarcasm alert announcement? No? Cool. Moving on…))

Even more to the point of silly and stupid though, I believe it shows that the piece is viewing things from a completely different perspective than the reader likely has. The problem most people have with savings, of any kind, is usually not an awareness that they should have savings. And while personal discipline is a part of it, that too isn’t the largest issue. No…

The problem most people have with savings is that life costs more than they earn.

I am not disappointed or upset that so many offer financial advice. And, I am not upset when those advice-givers tend to wade into obvious waters for the advice. Actually, hearing how to determine needs for retirement or methods for diversifying investments can be good stuff. Plus, an alarmingly large number of people do indeed lack any awareness of personal situations and spend beyond their limits. All understood…

It gets me when the advice-givers overlook that so many are living paycheck to paycheck. That so many are living in situations where the kids coming home from school needing money for an activity or supplies for a project can, which in turn creates scenarios where there is going to be trouble putting gas into the car or completing the grocery shopping.

Liz Smith is, from what I can gather, fine. Business Insider is fine. Article content is fine.

It’s all fine. Maybe even bordering on nothing-bad-to-see-here status. Still…

If you want to save more, a good tip is to spend less… the eye rolls continue.


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