The law a diminishing returns. When saving for tomorrow hurts today.

If you are part of the FIRE movement then you probably have a very high rate of savings, on average people pursuing early retirement have a forty percent or higher savings rate. Maybe you aren’t that hardcore about retiring early but are interested in saving for a normal retirement, either way you are making a decision to delay instant gratification for a reward later in life. Now for the FIRE community the delay in gratification is geared towards amassing a large enough portfolio of assets to throw off enough passive income to replace their earned income. The problem with this pursuit arises when the saving for tomorrow begins to hurt the present. Don’t get me wrong, working hard and saving a huge percent of income to leave the work force early and have more time to spend with the people we love and do the things that truly bring us joy is a very noble goal and in my opinion worth the sacrifice. Luckily I live in a beautiful city that has lots of green space and plenty of free or low cost activities for us to do. I also am a naturally frugal person and don’t require much to make me happy, so personally it is easy for me to not spend much money. On the other hand since I am not a single man but rather a family man with four teenagers and a beautiful wife, I have to take their best interest into account when deciding on family finances and how to spend our money. For starters my wife is also fairly frugal and luckily for me she shares the same interest in low cost outdoor activities, in fact her favorite thing to do is research waterfalls for us to go discover. This usually cost us some gas, some trail mix, and jerky, maybe if we decide to splurge we will stop for lunch. My kids on the other hand are all very different and unique individuals who have widely varying likes and dislikes. For starters going out to eat can be similar to an election, each kid will debate hard for their favorite place, often times joining forces with another candidate to strengthen their position. Rarely do they ever consider the cost of said restaurant or their parents dining preferences, they absolutely positively do not think about delaying present gratification so that I could allocate some of the funds to their 529 accounts. In some ways I admire that youthful ignorance of fear about the future. The kids also each have different activities they enjoy and we try to entertain those interest as much as possible. Those activities include, wrestling, martial arts, rock climbing, cross country, cheering, video games, shopping, and what seems like a never ending assortment of birthday parties and school related activities. As both loving parents who want to raise well rounded adults and give them every opportunity possible to discover what interest them, we have to also be financially responsible for both their future as well as ours. This often causes us to have to make tough decisions on how we budget our family money. The way we choose to do this is allocate a certain amount of money to kids activities and then divide that by four, that gives us a per kid budget for their activities. Now since some activities such as being a cheer leader are more expensive by nature, we ask our kids to decide if they want to only do one expensive activity or multiple activities, honestly sometimes we spend a little more on certain kids due to them going to state tournaments but this is a decision we make and we usually try to make it a family event.

kid s plating water on grass field during daytime

The point is that we can’t prioritize saving for tomorrow at the expense of today. Some of my best memories are of playing sports growing up and while I may not play contact sports today, I do enjoy playing tennis or shooting baskets from time to time. I also believe that being a part of a team and learning to work together to overcome obstacles, as well as learning to be a good sport regardless of winning or losing has helped me as an adult learning to navigate the business world, having a healthy sense of competition doesn’t hurt either. I know that by spending money on the present whether on the kids or on dates with my wife, or on family vacations may delay our exit from the workforce, however they are also investments in our current happiness and in our future selves.

two person carrying black inflatable pool float on brown wooden bridge near waterfalls

One of the best books I ever read was “Man’s Search for Meaning” which is set in the Nazi concentration camps and is seen through the eyes of a survivor. The book tells of the horrible living conditions as well as the abusive and inhuman treatment that took place, but analyzed as to what kept some prisoners going and made some give up and die. All were extremely malnourished, abused mentally and physically, as well as having all hope for the future stolen from them. Just imagine having everything you own taken from you, being ripped apart from your family and not knowing what horrible things were being done to them, being forced to work without shoes in the snow, and not being fed enough food for a small child to live on. However the author discovered that it was the people that were able to find some good, some small thing to be thankful for, that were able to survive. Every time I am going through a difficult situation I return to that book to get a perspective of gratefulness. The more I practice being grateful for even the little things in life as well as being present in the moment the less I feel a sense of delayed gratification.

silhouette of man touching woman against sunset sky

Many things that are good for us such as religion, exercise, dieting, and saving can be great for us and give us great outcomes, however all of them can also be taken to an extreme that have equally devastating consequences. In religion you see the extremist that are willing to kill others for their religion, in dieting and exercise you see people that develop eating disorders due to a negative view of themselves, in the savings arena we see people that go to such extremes that they not only drastically decrease their current enjoyment of life but also those around them. All of my prior examples usually stem from an underlying disorder and no matter how much weight someone loses or how much money they save, they will never feel satisfied.

In closing it is up to us to find a balance between our future goals and our present lives. It is just as important to enjoy the present as it is to plan for our future enjoyment as well. Regardless of whether we decide to allocate more money towards today or towards tomorrow, if we don’t learn how to be grateful for things in our present life, we will never be truly satisfied with any achievement.

Thanks for reading and I hope you enjoyed it.


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