There is an opinion piece that is being re-shared a lot: “If You Have Savings In Your 20s, You’re Doing Something Wrong“.
It’s a sparkly little article, published two days ago, filled with some fairly sweeping generalisations, and yet it appeals to the fun, carefree, rebellious, damn-the-institutional-parentocracy side of being a twentysomething.
This passage in particular:
This goes back to a piece of advice a very successful friend gave me: “Don’t save money. Make more money,” he nonchalantly stated, pushing me into a taxi.
Unlike most things people tell me, this advice did not go in one ear and out the other; it stayed with me and changed the way I look at everything from my career to my savings.
Before this piece of advice, I was frantic. I was always doubting and always feeling guilty. I lived in the most exciting city in the world (also the most expensive) and had yet to experience it.
I was trying to save, which meant trying not to eat. I wasn’t going out with friends, had yet to go to a club and had never seen the inside of a taxi.
I couldn’t enjoy my life because I was too busy worrying about my bank statement. I was too busy watching my savings instead of savoring my youth.
Why did I feel so guilty about spending money on myself and my life?
Oh dear. Saving at the expense of eating… Mmmm. I’m no psychiatrist, but that sounds disordered.
Perhaps that seems a bit mean. But if anyone is obsessed with anything to that level of anxiety, then the underlying problem is not the “anything” – it’s the obsession. And it needs help.
“Don’t save money. Make more money.”
I love this piece of advice.
If you think about it, money is just the flow of economic benefits – and when you become fixated on hoarding all those economic benefits into a bank account, then that “benefit” part becomes entirely hypothetical. It’s important that money flows, and that you get to experience some of those “benefits” – especially when it comes to things such as “eating”.
Of course it can be taken too far – where you spend everything without any acknowledgement that your ability to create the flow of benefits is limited.
But equally, the opposite can be taken too far – where you store everything and live as though you have nothing. Which is definitely the point at which someone successful should absolutely be saying to you “You’re doing it wrong.” Possibly while pushing you into a taxi (especially if you’re slightly inebriated but continuing to insist that you walk home at 3am because “savings” – but that is pure speculation on my part).
Getting back to the article, there is still more advice to be found. Although this is where we hit most of that sweeping generalisation.
Here are the bold headlines (note: lots of well-turning-of-phrase ahead):
When you’re too worried about your bank statement, you’re not making your own
Look – it’s true. You shouldn’t be “too” worried about your bank statement. Too much anxiety makes one unhappy.
But as Sheldon would say, a reasonable amount of concern around your bank statement is both prudent and evolutionary.
When you’re saving for yourself, you’re refusing to bet on yourself
That, or you’re refusing to bet on your environment consistently being able to supply you with what you need? Because empirical evidence?
Also, let’s not bring self-esteem into this. I highly doubt that many savers will be saying “I’m saving because I don’t believe in myself!”
When you have something to bank on, you have nothing to reach for
This is anxiety talk – it implies that “having a safety net” means “losing my creative drive.”
Problem is: if this “fear” is the driving force of your ambition, then you are invested in it. That is displeasing.
And unnecessary! We are quite capable of “having some savings” and “being ambitious” all at the same time.
When you live your life by numbers, you strip yourself of poetry
But also, when you live your life by poetry, you strip yourself of numbers.
Also, numbers can be pure poetry.
When you die, you can’t take your money with you
When you deprive yourself, you don’t learn how to TREAT YO SELF
Although, I can deprive myself sometimes, and treat myself sometimes. Life does not have to be one long orgiastic reverie of pleasure.
Also, that would be boring.
When you care about your 401k, your life is just “k”
I’m just not sure that you can say that. Or tell people that choosing to live this way means “you’re going to be full of regret”.
Because, possibly not. They might look across at their friends who didn’t care about their 401k, and have no regrets at all.
Anyway, it’s fun to talk about.
For something related, here’s a post from a few weeks ago on how saving as a teenager is also not a helpful as people make it sound.
Rolling Alpha posts opinions on finance, economics, and the corporate life in general. Follow me on Twitter @RollingAlpha, and on Facebook at www.facebook.com/rollingalpha.