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Live Now or Save for Later: The Now or Later Fallacy | White Coat Investor


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Enjoy Today’s WCI Network post from The Physician Philosopher.]

I was on the phone with someone the other day when money came up (as it naturally does in many of my conversations). I was discussing some of the reasons people struggle to save money. When I discussed the importance of saving while young, I could tell they disagreed, and their words reflcted that when they said,

“I just want to be able to enjoy life now while I am young and healthy, and able to do it. That’s what keeps me from saving more money. Do you know what I mean?”

To him, saving enough for his future and enjoying today were mutually exclusive. The more I thought about it, the more I realized that most people probably fall into this “now or later” fallacy. Falling on either side of the spectrum can cause work-life imbalance and burnout.

Let’s sort this all out.


The Fallacy of Living for the Moment

The post I link to more than any other on this site is the Three Kinder Questions post. These three questions, which were created by George Kinder, guide you through the big picture view of your life. The questions help you determine what is most important to you.

I often link to these three questions as the place to start your financial planning. Like driving to a beach vacation, working towards a retirement savings goal is hard to do if you have no idea what your final destination looks like. It is the same for any other financial goal, like whether to use a 529 for your kid’s college education or your employer’s 457 plan for your retirement.

You can’t answer those questions without knowing your big financial goals first.

However, in my conversation mentioned above, it occurred to me that these Kinder questions would be helpful for a different reason. They help us realize what is important. That way, we don’t waste time or money on things that we think are important—which fail the Kinder test—and prevent us from saving as much as we should for our future.


Knowing the Future

The problem with failing to save for tomorrow—because we are living for the moment now—is that our wants and desires change with age. In fact, we as people change with age. Do you think you’ll want the things in your future any less than the things you want right now?

My 20 year old self—who wanted to go to sporting events more than anything else—could not have understood how much he would want to spend every second with his kids when they got older. I don’t want to miss a single tee-ball game, recital, or after-school activity. This desire is one of the major reasons for my Hell Yes Policy.

The truth is that you can live for the moment. Yet, if you spend too much to do that living, it can cost you your future. More importantly, it can cost you the freedom to do what you want later on in life.

In essence, when you are living so large right now that you cannot save, you are choosing your current days over your later days. I’m not sure how many people would take that trade at age 50, 60, or 70. I’m sure I wouldn’t.


The Fallacy of Saving as Much as Possible

Admittedly, the person who saves too much in America is a rare phenomenon. Despite this fact, it is important to mention that the pendulum swings both ways in this conversation.

I know some people who are so frugal that it hurts. Their saving habits prevent happiness and cause unnecessary marital stress. In fact, this was the reason that I wrote my post on the 30% wealth accumulation rate.

It is possible to be so bent on saving money that we don’t let the purse strings loose enough to enjoy today. If I am being honest, I have a tendency to fall into this group myself.

Somewhere in the middle of living it large now and saving so much that it hurts is a balance.


Striking a Balance

The idea that you cannot both save for tomorrow and enjoy today is what we call a “false-dichotomy” in philosophy. It is the fallacy of “either or” where someone makes you feel like you must choose between one of two things as if they are mutually exclusive.

However, that’s not the case when it comes to living for today and saving for tomorrow. If we curb our spending with the Big 5, we can often do both.

Let me explain.

I am a believer in the backwards budget. The purpose of this is to make sure we are achieving our financial goals first. Some call this “paying yourself first” or “automatic savings”. Either way, the point is to take care of business first.

After we have done that, we are left with a certain amount of money. And I believe that you should spend that money however your heart desires, though I hope you understand how to spend money in ways that will make you happy.

All of this is kind of like doing homework as a kid. In my household, you couldn’t go out and play until your homework was finished. This work first, play second attitude works in finances, too.

And it will allow you to live in the moment now while you also save for your moments later.



I am a firm believer in balance. Please, don’t save so much now that you cannot enjoy today. I also don’t encourage you to live it up so much right now that you cannot save for tomorrow.

Learn to find the balance in moderation. You might realize that despite the saying, you can in fact have your cake and eat it, too, when it comes to living today and saving enough for tomorrow.

What do you think? Do you have a hard time striking this balance? Are you able to live some today while you save enough for your financial independence? Comment below!



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