Why Saving alone isn’t the best way to Financial Independence

By Elizabeth Lee

Special to the Financial Independence Hub

You’ve been told your entire life that you’ll never be able to accomplish anything unless you have a padded savings account: that every penny you can possibly set aside should be set aside, and you should absolutely never touch it.

You may even have been told that this is the only way you’ll become financially independent. You’ve been told wrong.

Saving is crucially important, but it’s important for entirely different reasons. You shouldn’t go out and spend your nest egg indiscriminately, but spending some of it might help you create a better and stronger independent (“findependent”) future. It all depends on how you strategize.

Why Saving is important

If you’re spending all your money as it comes in, what happens when you run into an expense you didn’t know was coming? Your car breaks down, you need to travel for a destination wedding, you find out you’re going to be a parent a little earlier than you’d originally planned, or you need to go to urgent care for a pesky sinus infection. How are you going to pay for it?

You had no idea that it was coming, and you didn’t budget for any of those things, because you didn’t know they were coming. If you don’t have savings, you might be set so far off track that you need to borrow to pay the bills. Without a savings account, you’re never truly protected from the financial variables life might throw your way.

Why Saving alone won’t make you Financially Independent

You need to spend money to live. Having a pile of money that isn’t doing anything for you won’t unlock a brighter future. Even in a high-yield savings account, the interest won’t amount to much. Financial independence means increasing your income, rather than just having an emergency stash to fall back on when something unexpected happens.

The idea of having savings is not to touch them unless you absolutely need to. The more savings you have, the more protected you are. But they aren’t helping you grow. Financial independence comes through growth, and it’s achieving that goal that will set you up for a smooth ride into your future.


Saving and budgeting don’t always go hand in hand. Some people are casual savers, only putting a little bit aside when they get a bonus or a refund that they don’t immediately need. That’s only part of a successful financial strategy. The other part comes from drafting up a budget.

If you want your money to really work for you, you need to focus on three things: making money, putting money away, and using your money wisely. If you set up a strict budget, it’s easier to make that trifecta live in harmony. Make sure you know how much you’re spending and what you’re spending it on. Cut costs where you can, and divide the rest between savings and growth.

Growth can be achieved either through investing or entrepreneurship. If you’re careful enough, you can simultaneously use both strategies to maximize your financial independence. If it’s too much to take on at once, you can pick one or the other for the time being.


Investing in stocks is easy to do from home these days. Some people do it exclusively online with small investments, and the return grows much larger and much faster than cash just sitting in a savings account. You can sell them when you need to and use the cash for other things.

If you’re not sure how you feel about stocks, investing in things like property that can be resold is great – particularly if you intend to maximize the value of that property and pocket a pretty penny in return. Investing in land is great, because it’s a finite resource. They aren’t making any more land, and it’s a lot easier to maintain than a property. A developer or someone looking to build a home might look to buy that land from you, and you’re in an excellent bargaining position when they do.


Start a business. It doesn’t matter what kind. If you want a brick-and-mortar pizza shop or an eCommerce beauty company, make that your goal. You can even start a profitable blog or affiliate marketing website if you don’t want to invest a lot of money into your venture.

If your startup takes off, a larger company might even offer to purchase it from you for a sizeable sum. If you have another idea, start a new one. If you don’t, you can use the profits to purchase a home outright and never see another mortgage payment again.

There are many paths to financial independence, and while savings is a crucial element of that independence, it is not the be all, end all solution of achieving your maximum potential. Always save, but don’t be afraid to spend if it’s setting you up for something better.

Elizabeth Lee is a business blogger and a traveler writing for PACK & SEND – logistics and transportation experts. Elizabeth believes that a job alone can never allow one to become financially independent and constantly seeks new ways and strategies to boost her income. Feel free to reach out to her at @LElizabethLee86.

One thought on “Why Saving alone isn’t the best way to Financial Independence

  1. The author suggests “start a business.”
    How many Canadians can read an income statement or balance sheet and can explain the difference between the two? How many know what ‘cash flow’ is, or profit ‘margins’ or ever heard of ROE?
    I’m a big believer in goals and reaching for the stars. But a dose of reality, please.

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