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Opinion: Pinching Pennies

Note: This article does not necessarily reflect the views of The Teen Trillionaire and is written purely based on the author's opinions.

You might have heard the phrase “pinching pennies” in passing. And you might wonder what it means. Pinching means to save your money by spending as little as possible. For more conservative people, you might think it’s a great way to fulfill some of your goals.


But while saving is important, not growing your existing amount of money can have a negative impact on your financial health. This ties in with a concept called the time value of money (TVM). It introduces the concept that the same amount of money today is worth more than the same amount of money tomorrow because of inflation. That means that the more you save, it won’t be worth as much as if you invested it.

Pinching pennies can also be emotionally draining. Many people may not be used to the frugal lifestyle, and in doing so, they may feel drained for not having enough money to spend on.

Also, as the lifespans of humans have expanded, pinching pennies may not be the best way to save for retirement. In the past, you were expected to retire at 65 with maybe 20 years of retirement. Today, you can retire at whatever age, but that can mean more retirement years and the need for more income to sustain your retirement for so long.

What You Should Do Instead:

As said before, pinching pennies can be a great way to save. But instead of trying to pinch pennies everywhere, focus on items that are very expensive or that you just don’t need. This can be more effective than trying to live extremely frugally.

And another effective way, possibly better than the previous alternative, is investing. There are many financial instruments you can invest in, whether you are looking for low risk or high risk, and how much you will spend. So, go on and be a Teen Trillionaire!

Written by Allie Chang

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