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Why you can’t save yourself rich

Published November 8, 2021

What should you do once you’ve built up your nest egg as a financial bolster – simply carry on saving? That’s not such a good idea. Why you shouldn’t leave so much money sitting around in your bank or saving account, why you can’t save yourself rich and what you can do with it instead.

Saving is a great thing, there’s no doubt about that. Because now and again we all have difficult times or a broken fridge that needs replacing – and for situations like these we need reserves in our account so we don’t fall into financial difficulties. That’s why there is a rule of thumb for any emergency fund: you should put aside around three monthly salaries. 

But once you have done that, it’s not a good idea to just carry on saving without a plan. The reason is quite simple: saving yourself rich doesn’t work. And even if you’re saving for bigger goals, such as a round-the-world trip or a gap year, which will take you a few years, you aren’t doing yourself any favours if the money is just sitting in a savings or current account.

Why the value of your money shrinks in a savings account

This is due to the lack of interest for money in your current or savings accounts. And also inflation, which makes sure that the value of your money gradually decreases. That means that you will be able to buy less for your money than was the case last year. And that isn’t the goal, after all.

The average inflation rate in germany is around 2 percent. Which would mean that in five years, €1,000 would only be worth around €905 and in ten year around €820. Not very good prospects at all.

What you should do with your money instead

The money that you have in addition to your emergency fund and you are continuing to save should be working for you – which it will if you invest it sustainably. Because you will be receiving interest on it. This means you will be doing something for the climate as you are channelling your money into projects that benefit the future, rather than destroying the planet. 

It’s also important to remember, of course, that investing isn’t risk-free either. That is why it’s so important that you pay off any existing debts first, then put money aside for emergencies and only after that invest money that you aren’t reliant on on a daily basis. 

And very soon we’ll also be offering you consistently sustainable investment products that you can trade on the stock exchange with – without also casting your values overboard! Sign up for our Newsletter now to receive all the latest updates in your inbox.

You don’t have any experience with sustainable investments yet? No problem! Soon we’ll be providing you with the most important tips to help you start investing – and we’ll show you what is possible with what budget. 

Still haven’t built up an emergency nest egg? Here are a few tips!

If you still need to start your emergency fund, but saving doesn’t come easy to you, here are our top everyday saving tips and step-by-step instructions on how to get your monthly budget under control.