Should you spend your money while you can?

by Xin Lu on 11 September 2008 28 comments
Photo: Laughing

A new article on Slate today details a study by some economists that say people should enjoy their money while they are still healthy and young. The conclusion of their study is that  money buys less happiness when you are in ill health so spending money while you are healthy gives you more happiness value for your money.  So should your abandon frugality for the sake of your happiness?

First of all, I think there is definitely wisdom in the carpe diem mentality.  No one knows when they will kick the bucket, and the world is too vast for anyone to discover completely in one lifetime. Although I am pretty frugal, I have to admit that spending money on good food and vacations does make me very happy. The Slate article mentions Chez Panisse, the Berkeley restaurant that is considered the birthplace of California Cuisine, and having gone there for one of my birthdays I could honestly say that it is definitely worth the $60 to $95 they charge.  I do believe that money is ultimately meant to be spent and enjoyed because you have worked for it, and being extremely cheap for the sake of being miserly is not a very enviable lifestyle.

Another reason I agree with the idea of spending your money while you can on the things you enjoy is that the world is changing rapidly and many wonderful things you can see, taste, and touch today  may not be there anymore 30 to 40 years in the future. For example, many waterfalls in China are drying up right now and many different species of animals are becoming endangered and even extinct.  Last year my husband and I saw endangered monk seals in Kauai, but would we still see them 30 years from now?  Would the beaches of the island still be so pristine and beautiful?  So in a way, I feel that there is an urgency to spend money and see the world  before it gets any worse.

I think the problem with the Slate article  is that it does not address that there needs to be a balance between spending and saving. The reason that I could spend hundreds of dollars on a meal and not feel guilty is that I know I have the money to pay for it.  I know that I already made a sizable contribution to my retirement fund for the month and all other bills were paid, so I can afford to treat myself. The problem many people have with spending is that they are not spending their own money so the happiness they bought gets wiped out by stress and worry stemming from the need to repay debt.

What do you think?  Are you cautious about saving and sacrifice the luxuries of today for a better financial tomorrow?  Or are you focused on enjoying your money today? How do you balance your pleasure spending and your saving?

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Guest's picture
Colin

Money is not the fundamental unit here. What is? It is time. It may seem like the question is about money it is really not.

What do you want to do with your time? Retirement is the decision to stop spending your time on working for money.

The "pretty simple" subject is meaning a couple of things. 1) Your money ceases to have value to you when you die (i.e., "you can't take it with you") regardless how much you have. 2) You never know when you'll die.

Plan to live until your 100 but live like you'll die tomorrow. Meaning don't hoard but don't burn it.

ENJOY LIFE! There are no do-overs. That's my take.

Carrie Kirby's picture

There's another reason to enjoy spending a little money and travel and experiences when you're very young -- if you subsequently decide to start a family, you won't be able to enjoy the same pleasures in the same way, or at least not for a long while.

Even if my husband and I could get away right now for one of the adventure trips we used to do, we wouldn't enjoy it as much because we'd feel guilty about spending the money. Before kids, we took trips we could barely afford, but we figured, what the hell? We'd be broke for a couple months until we'd paid off the bills, then we'd be fine. Now, every penny I spend on myself is a penny that hasn't been put toward my responsibilities -- maintaining our home, saving for college, putting healthier food on the table, saving for retirement.

That's not to say that when you have kids you'll never be able to have any fun on your own. But it's rarely as carefree, so I say enjoy -- within budgetary reason -- while you can.

I blog at www.shopliftingwithpermission.com.

Guest's picture

Yes, if you have enough saved/invested for retirement, emergencies, kids' college, etc. No, if you don't. But, rich or poor, it's still best to learn to love the free and cheap pleasures in life. To my way of thinking, after too many years of extravagant living and getting into huge debt to pay for it, financial security and freedom to do whatever I want whenever I want is the greatest luxury of all and worth adopting an extremely frugal lifestyle, which I finally did to get out from under my monster debts. I wrote about that in "How I Paid Off $50,000 of Debt in One Year" at http://shanelyang.com/2008/04/23/how-i-paid-off-50000-of-debt-in-one-year/

Guest's picture
ms. c

The article you're linking to is on Slate, not Salon.

Guest's picture
Guest

I would not feel happpy spending $100 on a meal. After the last forkfull and when the bill came, I would start to feel ill. However, seeing a nice, plump bank balance makes me smile--stock portfolio goes up, I get giddy!! I guess it depends on how you grew up. People with parents (like me) or grandparents who lived through the Depression would not look favorably on this notion of spend now and to heck with later. And the apple doesn't fall far from the tree.

Guest's picture
shawnna

I travel now because I'm single without kids. Its the perfect time to enjoy the world. I'll hopefully continue doing so, but probably less in the future. In the same breath I'm aggressively paying off my student loans. So I agree that it's important to enjoy life when you're young, but to ALSO take care of business.

Guest's picture

I agree. . .it IS all about balance. I'm trying to live that way now. Pay the bills, save money, and use money wisely. I'd much rather save up for a beautiful night out than fritter away money on fast food and coffees. By the way, I count a night at Chez Panisse as one of the top ten meals of my life. That was well worth the price tag!

Guest's picture
Guest

Why would they even begin this study if most Americans are spending everything they've got, and more, already? Maybe they're mining for the small population of frugal people to get them to loosen their purse strings.

Guest's picture
meechleigh

I think there has to be a finite balance in everything a person does within the realms of his or her life. My husband would "spend it all" on a few whims and short lasting bliss; I would plan and coddle and run it over a thousand times in my head before purchasing a simple tee shirt wondering if the guilt of buying a necessity would come back to haunt me. Then we realized the necessity of spending and saving without guilt and without shame. If there is something that is not a necessity, we find ourselves asking "Do I need it? Will it make me happy? Will it make me a better person?" And these three questions are all we need. We love to travel and will always travel no matter how little or how much money we have. So, I don't really see spending on travel as endulging, I guess it has just become a way of life for us and is unconsiously built into the budget. We enjoy good food and by good I mean if my husband "the chef in engineer's clothing" can't dish it up, there are a select few restaurants we are willing to spend the cash. But then again, if you go out to eat daily then the appeal is gone and it is more of a chore than a pleasure.

Guest's picture
Guest

pay for it with a credit card that you can't pay off at the end of the month.. that's the issue with most people.. we/me/you aren't spending what you have right now, we are spending what we think we might have tomorrow..

Guest's picture
Curt

Inflation is likely to be 10-15% for the next decade with the governments bailout monetary policy. Therefore, the dollar could loose 70-90% of its value. Spend your dollars while they still have value.

Guest's picture
emdoozie

Yes, save and invest for the future, but live now. Enjoy the fruits of your labor. Takes some risks, buy the things you love. Just be smart about it. Don't spend 60 years of your life in a vice grip saving every last penny, then the last 20 or so trying to catch up with what you missed. Live hard, live now, because tomorrow is not promised for anyone. If your not living your dreams, start, and enjoy the ride.

-doozieUp
http://doozieUp.com

Guest's picture
Debbie M

I have different budget categories for current and future expenditures. This way I never feel guilty spending for current fun because I've budgeted for that in addition to retirement and future repairs and replacements of things.

I like your point about how the world changing means that you should spend now on things that may not be around in the future (specific restaurants and performers also fall in this category and perhaps also things that require a lot of gas like going overseas) but it also means that that you should save for things that are not available now but will be in the future. (If I had been retiring 20 years ago, I wouldn't have known specifically to save for a personal computer, but it would still be good to have a fund for that sort of thing.)

Other things that change are us, our friends, and our circumstances. I'm always trying to take advantage of odd opportunities to do things that might not be at the top of my list such as visiting a friend who got a postdoc in Switzerland or going on the family trip to Disney World. And of course do things with friends and relatives while they're still around and friendly. And do things with your kids while they're still around. Also, I bet some movies would be more enjoyable to watch now than they will later, out of context (especially the special effects ones). There certainly some good books that I feel I'm not able to appreciate but could have if I'd read them as a kid.

Finally, some things are easier to do at different ages or different times in your life. Learning languages is easiest as a kid. Wearing braces works better when you're younger, too. Starting a business might be best either when you're young with no dependents or when your older and wiser.

Guest's picture
Guest

is between being frugal and being a miser. A person who embraces frugality knows that they still need to enjoy things in life that they can afford (travel, food, wine, art, whatever stirs your passions) and a miser closes themselves off from being able to enjoy things like that.
My husband and I save, we put money away to retirement, we have no debt other than our mortgage and if we want to treat ourselves to a dinner at Chez Panisse (or Michael Minna or Gary Danko or wherever) and we have the money in the bank then more power to us. It can make a special occasion all the more special for doing so.
BUT I will not just 'blow it all now' and not think of the future. Yes I could get hit by a bus and die tomorrow but odds are that I will live into my 90's and do I want to be in a state run nursing home or have saved up enough that I can be in a pleasant facility with my own hired care? The difference it HUGE (having seen both sides).
Live for now but plan and think for the future.

Guest's picture
Wilson

Well since you have to spend almost all of your younger years working the choice is already made. You must spend your money when you can't. The financial services and health-care industries thank you for your business, although I doubt even they get to enjoy your money.

Guest's picture
Maus

This article is profound. Postponing joyful occasions, whether travel or a fine meal or visiting a distant friend, is a recipe for disaster. When I was in my twenties, I did not save for the future, so in my thirties I worked like a sharecropper to bring in a harvest that would provide for me in old age. I did not travel. I did not treat myself to even the occasional splurge. I neglected my friends. I figured I'd have time to manage all that in my sixties, when life would be all liesure and not toil. Well, I developed a chronic illness; and now, in my late forties, I cannot enjoy travel or anything phyically challenging. The pile of money I've got simply won't deliver the same experiences I could have had if I'd been more balanced in my thirties. Live each day fully.

rstlne's picture
rstlne

That notion might have worked when I was in my 20s but I've shopped, dined, and traveled enough to know that spending more money won't necessarily make me happier. Some of that activity actually made me less happy. And so I save my capital for the day when I come across something that would be really meaningful.

Guest's picture
Beth

I hate that society says we need to do expensive things or buy expensive things to feel "alive". I would rather have a lifestyle that balanced spending and saving so that I could feel alive most of the time, not just when I'm eating an expensive meal or taking a vacation.

I agree with the Colin... The real issue is time. I've been happier in the last year since I decided to give up my workaholic ways and spend more time with family and friends.

Guest's picture

It's too easy to seize the day and to hell with the consequences. It may then turn out that the 5 years you spend living it up, cause the next 25 years to spend in drudgery. Isn't it much better to just be content for your whole life?

Guest's picture
Lindsey

I'm doing just that, in moderation. After living a little too large on stupid stuff, I'm $8,000 in debt (having paid off half of it already), but I just bought a ticket to Germany to visit one of my best friends. The reason I'm splurging? I just received a modest windfall in the form of some serious overtime (96 hours worked in 8 days for Hurricane Gustav response). I could put that money (more than my regular paycheck) toward paying off my debt a month or so early, but I'm spending it on visiting a friend I haven't seen in a year and visiting a country I've never been to. I'm not falling behind on any debt/bill payments, but I'm not simply saving the money either. I'm using it to create memories and new experiences.

Guest's picture
Guest

I think there are different stages in a person's spending. When you are young and not get married as some peoples here said, you should spend what you earned money to have some funs. But when you have a family, you may think a little bit more about your kids and your future. After your kids move out door, you get free again, you may spend a little more in yourself and have enough funs by a good planned retirement life, a good golden year.

Guest's picture
Guest

Doesn't frugality MAKE you happy?

Guest's picture
hbemis

This article is silly. Being frugal was never about being a scrooge. Frugality is about know what you value and being financial wise about pursuing those things you do value. So, I love books, which means I don't care if I buy used things or buy very little of other things because I have more money for books (edwardrhamilton.com). I also like to have investments and savings. I don't want to work an inflexible 9-5 job so I find creative ways to be a big saver instead of a big spender. This article is silly and stupid. Economists and Slate magazine have to be taken with a grain of salt. Frugality not sillyness never hurt anyone. No one is trying to be a miser.

Guest's picture
Moneymonk

...spend it

It you have the cash (not credit) to pay for things I do not see the big deal. Once children enter the position if you just make more money you will not a problem with enjoying your hobies and passions. having a child did not make a difference in our financial lives. We are still able to vacation and eat out at restaurants

www.moneymonk.net

Guest's picture
Moneymonk

...spend it

If you have the cash (not credit) to pay for things, I don't see the big deal. Once children enter the picture- if you just make more money you will not have a problem with enjoying your hobies and passions. Having a child did not make a difference in our financial lives. We are still able to vacation and eat out at restaurants

http://www.moneymonk.net

Guest's picture
Guest

I agree . I work at saving money were i can to spend it on the things thats matter. if i die tommorow it not going to matter what i have i retirement if i cant enjoy life while im on my way there.

Guest's picture
Guest

Yes, Yes, Yes

We should absolutely spend money to make our life better because life if futile and it makes NO SENSE to hoard it. There is always more money that comes to a person... it is only a tool.

The fear of spending is because the strong financial industry that makes everyone feel poor, even the people who are doing really well financially.

I worked in financial services for 15 years, and much of the advice given is flawed, edging on the unethical.

We always travelled with our kids everywhere: Europe, Caribbean, Hawaii.... and we don't make a lot of money,... but if you want to go have fun you always find ways to accomplish it.

I just can't imagine myself 60 year old doing some of the difficult hikes we've done with kids... so I say YES - SPEND YOUR MONEY _ ENJOY YOUR LIFE

Guest's picture
Guest

I'm spending my retirement money on gasoline. When I run out, I'll stay home.