Conservative spending is a financial ideology which emphasizes fiscal responsibility. For example, while the average American family spends a little more than they actually make each year, a family dedicated to conservative spending would spent only about 90% of what they actually make each year. The "extra" 10% would be placed in long-term savings to be available for unforeseen need. In the happy event that no unforeseen need arises, the extra funds are available for retirement, inheritance, or other occasional use.
Conservative investing is a strategy used to preserve an investment’s principal value by utilizing low-risk or no-risk options, such as money market securities, government bonds, or large-cap equities. Although no-risk investment options often are attractive, in practice they do little more than grow the principal at the rate of inflation, meaning that in real value the portfolio will not increase over time.