Spend Now or Spend Later

Jun 3, 2014 by

CurrencyYou’re holding a $20 bill in your hand. You’ve got two options:

  1. Spend it
  2. Save it

And you thought personal finance was complicated.

Consume Now or Consume Later: That Is the Question

We make a choice, whether consciously or subconsciously, between saving and spending each dollar that comes our way. Ignoring for the moment that you may still have a few bucks the doctors didn’t know about in your bank account when you pass to your Eternal (non-monetary) Reward, you will, sooner or later, consume goods or services with all the cash you manage to corral during this Earthly life. When you think of it that way, the essence of personal finance reduces to this:

→ Should I spend this $20 now?
→ Should I spend this $20 later?

Choosing to spend your $20 later is better known by a simpler name: Saving.

How Do You Choose Between Spending Now and Spending Later (Saving)?

I recently ran across a USA Today article describing the results of a survey of 1,000 Americans on their thoughts about money, retirement, and consumption. The survey subjects were characterized as “affluent,” defined as having between $50,000 and $250,000 in investments (excluding homes and other real estate). Here are a few survey highlights I found particularly interesting:

  • 55% of respondents said they fear not having enough money in retirement

Nevertheless, to save more for retirement:

  • 33% weren’t willing to cut back on entertainment
  • 30% wouldn’t reduce eating out
  • 28% weren’t willing to forego vacations


  • 63% said having money to live “in the here and now” is a priority while only 48% said saving for the future is a priority

A couple other gems from the survey:

  • Even if they won a million bucks, only 19% of respondents would use it for their retirement
  • 89% had a household budget, but 66% said they are consistently unable to live within that budget

The “Here and Now” vs. Retirement Security

How do you see the Spend Now vs. Spend Later choice?

Does saving make you feel you’re missing out on life now?

Does spending today make you feel you’re cheating, maybe impoverishing, your future self?

Have you found the magic formula to do both: Save enough for the sort of retirement lifestyle you want AND live a happy, fulfilling here and now. Please share.

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  • Travis Pizel

    I think doing both is important – Ramsey’s famous quote of “Live like no one else now, so you can live like no one else later” doesn’t resonate with me at all. Live on bread and water and live in a cardboard box for 40 years so my retirement can be kick ass? No thanks. What if I die at 45? EVERY year is meant to be enjoyed. So, I meet with my financial adviser and have a plan to be ready for retirement….and the rest of the funds are mine. I remove any expenses that don’t bring me value, and spend my money on things that facilitate me enjoying life. I’m enjoying life now, and I’ll continue to enjoy life later. 🙂

    • A lot of what Dave Ramsey has to say doesn’t resonate with me, not that he hasn’t helped a ton of people.

      I agree, the idea is to enjoy each year of life as much as possible. I wonder though about people who spend lavishly–say world tours and only the best restaurants–when they’re young, thinking something like they want to enjoy their money when they’re fit, able, and unencumbered by children. Part of the key I think to finding a good balance is understanding that having lots of fun and leading a rewarding life does not automatically require spending big money.

  • Like Travis, I think having a balance between spending and saving is key. I would rather live a normal (but still good) life now AND later than be living lavishly now and destitute later.

  • The journey can still be enjoyed while saving for the future. It doesn’t have to be a one or the other proposition. It may be imbalanced for a short time to save an emergency fund and get out of debt. But once that is gone a person can save for retirement without the guilt of spending in the present.

  • Barb Friedberg

    I totally don’t get the resistance to saving for the future. You can have a fulfilling life now without blowing the bank. Where’s deferred gratification?

    • One challenge is resisting the professional marketers’ constant drumbeat that you can’t have a fulfilling life without spending a lot of money.

  • Sassy Mamaw

    I don’t think that saving some money and spending some money would be difficult if you started out that way. When you are spending everything you have plus more, saving anything seems like a huge lifestyle adjustment. Let’s face it, even going from that spending mentality to living within your means can be a huge lifestyle adjustment, without saving anything!

    • Thanks Sassy Mamaw. You’re right–for many, living within their means and putting themselves in position to begin saving some money can require huge lifestyle adjustments. The thing is, if those adjustments are not made voluntarily, no matter how challenging they may be, they’ll happen involuntarily when health or other issues make earning money no longer possible.

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