Dissaving Definition

Dissaving is the act of spending an amount of money which is greater than the available income. Dissaving is the opposite of saving and may include tapping into wealth from a savings account or other accumulated wealth. Further, an individual who dissaves may also borrow against future income through loans or cash advances on credit cards. If unchecked, dissaving may continue in a downward spiral to the point where an individual's income, savings, and all available credit are exhausted. To state it concisely, dissaving is living beyond one's means. Negative savings is another term associated with dissaving.

Dissaving may happen on an individual or a macroeconomic level. When dissaving occurs on the macroeconomic scale, it indicates that the population or government is spending all available funds and is not placing money into investments or other savings accounts. The situation may occur if the area experienced a widespread natural disaster such as an earthquake, hurricane, or wildfire. Other causes may include political upheaval, wars, times of civil disorder, periods of hyperinflation, and low exchange rates. Without funds to fall back upon, the population would have to resort to borrowing to provide for their required needs.

Individuals may experience a period of dissaving for many reasons. Some of these reasons may be under the control of the individual, while others are outside of their control. Unemployment, unexpected illness, and accidents are all events which are, for the most part, outside of the individual's control. 

Events within the control of the dissaver may include making a series of relatively small expenditures, such as eating out frequently or placing small purchases onto a credit card. Without realizing it, they may spend more than they expected because they put the small purchases onto the credit card. Other harmful activities include buying big-ticket or expensive items such as cars, vacations, jewelry, or designer clothing.

During a government shutdown, like the United States experienced beginning on December 21, 2018, many federal employees were furloughed or forced to take unpaid leave. A Forbes article estimates about 800,000 federal employees were forced home without pay. In effect, these workers became unemployed due to no fault of their own. Without paychecks, many of these people became forced into dissaving or taking out loans to continue to pay their monthly financial obligations.