5 remarkable financial lessons you can learn from the humble squirrel

A squirrel with a nut sits in a tree

The UK is home to two species of squirrel: the native Eurasian red squirrel, and the invasive grey squirrel, but worldwide there are more than 200 different species. 

From the five-inch-long pygmy squirrel to the three-foot Indian giant squirrel, there’s a lot more to these creatures than British nature-lovers might suspect. 

Despite being opportunistic feeders, squirrels are famed for their unique foresight, burying nuts when they are available to eat in harder times. To the untrained eye, their food storage may seem random, but in reality, there’s a lot of strategy behind how squirrels stash their food. 

As 21 January is National Squirrel Appreciation Day, read on to discover five things you can learn from squirrels about preparing for a secure financial future.

1. Squirrels plan for the future

If you’ve ever gone on an autumnal walk in the park or countryside, you’ll know that, in the run-up to winter, squirrels busy themselves by burying nuts to eat in the coming months. 

The industrious rodents dedicate hours a day to finding and burying food for the future – according to Scientific American they can bury an incredible 3,000 nuts a season.

By planning ahead and saving nuts for times when their regular food sources are not available, squirrels ensure that they never go hungry.

In your own life, by planning ahead and diligently saving, you could ensure that you always have funds to fall back on, such as during an unexpected event or later in life.

Not having a big enough retirement fund is a real concern for many. In a survey of 1,000 working and retired individuals, Aegon found that 45% of people were worried about running out of money in later life. 

By squirrelling away money into your pension now, you can build a retirement fund large enough to provide you with a regular income throughout your later years.

2. Squirrels diversify their assets

Not only do squirrels store nuts away for harder times, Scientific American reports that they’re also strategic about where they hide their stash, spreading their supply over a range of locations through a process called “scatter hoarding”.

This is a strategy that you can replicate with your investments. By diversifying – scattering your portfolio across multiple sectors, funds, and geographical areas – you could manage risk in your investments and smooth any returns. 

Diversification is one of the key pillars of the BlueSKY investment approach. You’ve previously read about how investing too close to home could affect your long-term returns, so ensuring your nuts are not all stored in one place can lead to better outcomes.

3. Squirrels store different nuts in different places

Incredibly, squirrels also store different types of nuts in distinct locations. This behaviour, referred to as “spatially chunking” in a Britannica article, enables them to store specific nuts in specific locations, protecting their favourite types. 

As Scientific American reports, fox squirrels prefer almonds to peanuts. As a result, they will bury almonds further away from their source and in lower densities than peanuts.

When saving for your future you will likely have a range of short, medium, and long-term saving goals. Following the squirrel’s lead, it can be beneficial to put funds aside for each of these goals in different types of savings and investment products.

Short-term savings like your emergency fund could benefit from being placed in an easy access savings account. This way you can withdraw funds quickly in the event of an emergency.

If you are saving for a medium-term purpose such as buying a car or holiday, a Cash ISA or fixed-interest bond may be preferable. Products like these could give you higher returns than a savings account, but the money in them may not be so easily accessible.

Equity-based investments might be better suited for long-term savings goals such as building a retirement fund. Though equity-based investments can be more susceptible to fluctuations in value than other investments or savings products, over a long period they have the potential to deliver better rates of return.

4. Squirrels are wary of threats

When burying valuable resources like nuts, squirrels have to be wary of other animals stealing their stash. To protect their future food, they employ several protective measures.

The Smithsonian reports that, if a squirrel is suspicious of potential nut thieves, it will bury its nuts in hard-to-reach places like muddy areas. In addition, Scientific American details how these ingenious creatures trick thieves into searching for their nuts in the wrong areas by performing fake digging.

When investing and saving money for your future, like the squirrel, it is important to be wary of potential threats, particularly from fraudsters and scammers.

There are many common pension and investment scams. Taking the time to learn about a few common types could save you money and stress.

It’s also important to take your online security seriously when saving. It could pay to be vigilant, double checking all communications about your investments and ensuring they are genuine before taking any action.

Additionally, being cautious if you’re approached with genuine-looking savings or investment opportunities can help you to avoid losing a significant sum for a scam.

Finally, make sure you’re checking your accounts regularly. Simply reviewing your statements for any unusual activity can be an effective way to avoid losing money to criminals. 

5. Squirrels consider their nuts carefully

Before burying a nut for the future, squirrels assess the quality of the nut. As naturalist Steve Tekiela told CBS News Minnesota: “[squirrels] pick up the nut and they smell it. They turn it around in their paws, kind of roll it around […] they are assessing it for their viability.”

When considering saving or investment routes, take the time to think about which options could be best for you. This will depend on your personal circumstances. Some factors to take into consideration include:

  • How much risk are you willing to take?
  • What time period are you looking to invest over?
  • Are there more tax-efficient investment opportunities such as a pension or ISA?

Talking to a financial planner can help you to make investment and saving decisions that are right for you, and give you the peace of mind that a professional is on your side.

Get in touch

To find out how we can help you build your “stash” for the future, please get in touch. Email info@blueskyifas.co.uk or call us on 01189 876655.

Please note

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future results. 

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts.  

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.