Spend while you’re young?

Yesterday, Slate published an article titled Spend your money while you’re still young – you’ll be happier.

Intriguing premise, since we’re always told that we need to Save! Save! Save! for retirement.

As explained in the article, the basic theory is “that you’ll get a bigger bang for your consumer buck by spending while you’re healthy, before old age starts to take the fun out of life’s indulgences.”

It’s a bit of a depressing premise if you think about it. We save while we’re young so we can afford to live comfortably when we’re old, but when we’re old, we’ll be so sick and crabby that we won’t be able to enjoy it. Personally, I would like to be old, healthy, and happy. And the study quoted in this article indicates that healthy retirees are happy – it’s the sick ones who aren’t.

Of course, I’m sure it’s still better to be old, sick, crabby, and able to pay bills than old, sick, crabby, and broke. So even though it might make you happy right now, you can’t exactly spend everything and not save for retirement.

So what’s the lesson here? If you have a family history of illness in old age, spend more of your money now, because you’ll be too unhealthy to take fancy trips when you’re old? Take good care of yourself and save your money because you’re so healthy that you’ll be living well past 100? I think it’s a mix of the two. Save money, but make sure that you’re still managing to have a little bit of fun while you’re young. Not too much, of course – you do still need to be able to afford retirement.

As the authors put it, this means that those retirees who are still living frugally should stop putting off that fancy dinner and go enjoy themselves while they’re still healthy to do so. And for the young? Seize the moment and live life to the fullest.

(But don’t forget to save!)

Megan Smith

Megan is a 40-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:

In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance.  It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information.  It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck.  While that was working for me, clearly I needed a better plan.

While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.

Except that’s not what an emergency fund is for.

So I did a lot of research, read a lot of blogs, and decided that I needed a plan.  I needed to budget.  I needed to know what I was spending my money on.  I needed to prepare for the future.

I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way.  I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.