Paying Yourself Forward: Spend or Save?

There was an interesting essay in the New York Times the other day. It had a bit of tongue-in-cheek to it, as well as some serious suggestions. There was a fair amount of outrage in the Comments section. Finance is a sensitive subject these days.

Anyway, the article talked about how we can be “patriotic”: do we spend or do we save? For years, Americans were chided for spending and not saving; now we are being chided for saving and not spending. The problem with saving has to do with the “paradox of thrift,” whereby spending can help the economy as our money spirals away from us, while saving is basically like putting a stopper in your drain.

The author went on to suggest a kind of spending that would be good for the economy and for us. He said we should spend for our future selves. Hence, instead of patronizing a rent-to-own furniture store (shoddy stuff at usury-level interest) we should save up for a better and less expensive sofa. He said that a Costco membership would help a family with babies save on diapers. Getting a programmable thermostat and investing in other energy-saving items would save your future self money on utility bills. And so on.

Well, aside from the fact that I am a strong advocate of cloth diapers for the bottoms of our precious little ones, I think all the ideas are good ones. Read the essay for other pay yourself forward ideas.

Then I thought it would be instructive to look back and see what I have now that involved paying myself forward. What was a nice gift from my past self to my present one? My big All-Clad sauté pan, my Calphalon cookwear, a few cookbooks, my good quality sheets, the expensive alpaca blanket that my son “borrowed,” the big cupboard in my kitchen, and, of course, my too-expensive cottage with its slate roof. All these items were bought expensively but right the first time and will provide many years of good service.

Wow! That’s a short list. Of course, I could mention my cloth diapers, but I gave them away long ago. Not one item of clothing or jewelry makes my list.

Then there are the intangibles that bring us the greatest happiness, according to reports. For this I would include our many vacations to visit family and to travel abroad. Funding our children’s trips to Japan and elsewhere. Sending our kids to a wonderful pre-school. Sending our kids to a wonderful summer camp. These pay forward memories, but are not the kinds of things the author was talking about.

Of course, all these lists are very personal. I was struck by how long it took me to compile my short list. And I am going to start thinking about how to pay forward my future self.

And so, dear readers, how did your past self pay forward your present self? And how will you pay your future self forward?