Feast & famine

When Joseph interpreted Pharaoh’s dream as, “save a little bit for later” he established the concept of setting aside some of what we have now for down the road when we will have less.

Sure, while the land was producing tons of grain the people could have grown fat and par-tayed their loincloths off. That would have been the old way. The excess bounty would have been sacrificed to the gods in the hope that they would shine their goodness on the land in the next year. Then Joseph came along and said, “Hey, dude, you better save some of what you’ve got. There are tough times ahead.”

Happily, Pharaoh listened, storehouses were built, corn was saved, and the people had enough to sustain themselves when the seven years of famine hit.

It’s a simple concept really: whatever you grow (be it maize, corn or money), set a little aside and when things change – as they inevitably will – you’ll have the means to cope with fewer resources.

So how did the idea of savings fall so far by the wayside?

Have a look at this graphic that compares household debt and savings rates and see if you can pick up a pattern.

The countries with the lowest debt levels have higher savings rates. Countries like the U.S. (Canada isn’t on this graphic) and the U.K. have the highest levels of debt and the lowest savings rates.

Could it be that the mere fact that we have access to credit has changed our “need” to save. Knowing that we can pull on a line of credit or whip out a credit card to buy food, have we stopped seeing the need to set a little aside? And if that’s true, are we really planning to use credit to fund our retirements?