The Anthony Robins Guide To Payday Loans Near Me US

Table of Contents

What’s the difference between saving and dissaving?

Understanding Dissaving

When Governments Dissave

Reasons for Dissaving

Real World Example of Dissaving

Personal Finance Budgeting & Savings

Dissaving Definition

By Maya Dollarhide

Updated September 19 2022

Read by Ebony Howard

Facts checked by Jared Ecker

What’s the difference between saving and dissaving?

Dissacrting is spending more than one’s available income. This may be accomplished through tapping into an account for savings, taking cash advances on credit cards, or borrowing against the future earnings through an payday loan.

Understanding Dissaving

To put it simply, dissaving is living beyond one’s means. Negative savings is yet another word that is associated with dissaving.

Key Takeaways

Dissaving is the reverse of saving.

It’s when you spend more than one’s income by dipping into savings, purchasing on credit, or borrowing money.

The government can also be a dissaver as well.

If this practice is not regulated and the dissaving process continues, it could spiral into downwards spiral until the individual’s savings as well as credit are exhausted.

It should be noted that not every dissaving situation has a negative connotation. For instance, a person who has saved an entire career could live comfortably while dissaving. The person is on a fixed income but spends more every month, taking a dip into savings to make up the deficit. This could be referred to as planned dissaving.

When Governments Dissave

Dissaving may be seen on an individual or a macroeconomic scale. If there is a dissaving trend on a macroeconomic level, it suggests that the whole populace or the government is using every dollar available but isn’t saving or investing, and is borrowing to stay afloat. In the end, even installment debt repayments become unmanageable.

Dissaving may reach an unsustainable level after a natural disaster such as the occurrence of a hurricane, earthquake, or wildfire. Other reasons could include political upheaval, war or civil disturbances, and hyperinflation. In the absence of resources to fall back on individuals or their governments have to borrow to pay the necessities of life.

The reasons to not save

Dissaving may be a habit that is the result of poor judgement or an unavoidable response to the onset of a crisis. Unemployment, an unexpected illness, and accidents are all events outside of an person’s control that could drain savings and cause a cash crisis.

A habit of dissaving could begin with a string of relatively small credit card expenditures. Over time, this can lead to a large credit card debt and income that is compromised due to regular payments that carry a high rate of interest. Regular savings decrease or cease as the person juggles debt payments. A sudden event could be a personal financial disaster.

Real World Example of Dissaving

The United States endured a government shut down for over a month between the end of December 2018 to January 2019. A large number of federal workers and contractors were forced to work without pay or required to take unpaid leave. According to the U.S. Bureau of Economic Analysis (BEA) estimated that 340,000 federal employees were furloughed. Another 460,000 were required to work, even though they were not paid until the government’s funding resumed.1 Without regular paychecks, many of these people were forced to save to live and meet their financial obligations for the month.