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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