Stashing all your money away for a rainy day makes no sense, but even if it did, that's your business.
My earliest memory dates to the womb, a month before I was born, and was of diverse Poobahs haranguing the public about "not saving enough".
Ever since I've heard this mantra chanted incessantly, most recently by the Reserve Bank governor Graeme Wheeler.
He chimed in with a speech complaining at our failure to save, and the standard shallow blather of "too much going into housing". Why the media report this guff is a mystery.
Indicative of how out of touch Wheeler is, is his failure to realise that probably 50 per cent of households struggle to make ends meet and to varying degrees, are dependent on the state to stay afloat. Saving and investment are not considerations for them.
As for the higher income 50 per cent, they didn't get that way by being stupid. Should they put money on bank deposit at an interest rate usually equating with inflation? Yes, if they're idiots. Should they "invest" in funds and superannuation schemes notwithstanding that worldwide, for four decades, the returns have been abysmal, other than for the funds' promoters who have done very well indeed, which is why they're in the savings preaching vanguard.
In the 1960s, 70s and early 80s, prompted by a tax deductability incentive, people were encouraged to buy whole-of-life insurance policies to provide an income on retirement. The minor cost life insurance component was sensible but find me any retiree who relied on the retirement income promise and is happy with the outcome.
In England a few years ago I read a newspaper story of two now-retired 65-year-old ladies who had paid into such a scheme. The accompanying photograph showed them glumly holding up their monthly dividend they could henceforth look forward to - for 60 pence each, all they would be receiving after application of the insurance company's "investment acumen" over four decades. It's a common story.
Saving is for fools. Saving for the proverbial rainy day is illogical, after all, if it comes there goes your savings while if it doesn't, you've simply wasted spending power. Insurance adequately covers unexpected contingencies.
There's been a single exception to this relentless idiotic savings incantation, namely from former Finance Minister David Caygill who, about 30 years ago in a speech, spoke rare common sense on this subject. Dismissing the savings urgings as foolish, he reminded the audience that as part of the global economy it mattered not to New Zealand whether its capital requirements were accrued locally or borrowed from abroad, and he was absolutely right. There would solely be a need for national savings if we were the only country in the world.
To that, let's not have the shallow response from the economically ignorant that the interest goes abroad. So what! So does the cost of your cars, books, TV shows, bananas, foreign holidays, TV sets and incredibly cheap goods from The Warehouse. That's why we have export industries to pay for these purchases. And when imbalances occur between foreign income and expenditure our floating exchange rate automatically adjusts so that it ultimately comes out in the wash.
The Southern European nations are in the poo because they abandoned this realism and fixed their currency to rich Northern countries in the form of the euro. By persisting they will stay in the poo with outcomes such as in Cyprus where their desperate government literally stole Wheeler's vaunted savers' money. Should Wheeler try his savings ravings there, the Cypriots would hang him on high, a fitting reward for talking tripe.
It's not the Reserve Bank Governor's role to hound the public on their discretionary spending. In a free society it's no one's business what people do with their hard-earned cash. That said, I'll wager Wheeler, on his high salary, larger than the Prime Minister's, exempts himself and owns a damn good home and doesn't fritter his income by "saving it". I certainly hope he hasn't a holiday bach which would be the height of hypocrisy. Should we ask him he would quite rightly tell us to mind our business. A pity therefore he doesn't mind his and confine his efforts to what he's paid to do rather than this ill-considered preaching beyond his brief.
Finally, why this endless whining about "misplaced" investment in housing? It's ludicrous. Along with food and clothing, housing is one of the three key essentials of life. If people aspire to upgrade their homes, just as they upgrade the quality of their food and clothing in line with rising incomes, so they should and it's nobody's concern but theirs. Apart from the all-important pleasure they will deprive, history shows that on the financial front they'll come out way ahead of Wheeler's savers. It's been a winning formula for decades because it's logical and proven. Attacking it defies comprehension.