Saving or spending: Which lifestyle is better?


Fact Box

  • 5,000 BC is when metal objects first started becoming currency, but coins originated in Lydia around 700 BC. Paper money originated in China during the Song Dynasty around the 11th century CE, about 20 centuries after the use of metal coins began.
  • On February 3, 1690, the Massachusetts Bay Colony issued the first iteration of paper money in the United States.
  • As reported in June 2023, 36% of Americans have more credit card debt than savings. 
  • As of September 2023, the Federal Reserve reported the American household net worth “rose to $154.3 trillion during the second quarter of 2023.” However, all American debt stands at an all-time high of $71.2 trillion.

Gina (Spending)

The debate on whether to save or spend money, evaluating the short-term benefits to the eventual long-term gains, has always been relevant. While saving is never a wrong choice, spending money contributes to our happiness, which is something we all strive for. Money is a medium of exchange, swapping funds for services. A recent study suggests that 'we work harder when we are happy.' 

Although money doesn't buy happiness, it pays for fulfilling life experiences which feed our happiness. This creates a cyclical action where we work to pay for experiences; the experiences make us happy; our happiness causes us to work harder, and our effort in the workplace generates money for more adventures, thus repeating the cycle! It's a positive way to experience life and to make future goals for adventure and fun to work towards.  

Another study states that consumption is 'at least five times' as large as an income increase, showing that people are happier with spending their money than they are with generating it. After all, money is made for spending—if not immediately, then certainly later. This same study suggests that consumption levels affect life satisfaction, reflecting the benefits of spending. 

Saving money focuses on attaining 'means goals,' which Vishen Lakhiani, Mindvalley creator, describes as 'goals [that] follow societal concepts of success or serve someone's expectations.' But life, as it stands, is short. While saving can lead to luxurious experiences in the far or near future, we are never guaranteed to reap our reward. Instead, we should work hard and enjoy the fruits of our labor rather than saving indefinitely for our end goals, which we may never see. 

Luis (Saving)

Saving is not only one of the most important financial decisions you can make, but it can also lead to a lifestyle of comfort and prosperity. Saving money allows one the financial freedom we all seek—the freedom to afford various services when needed. After all, saving is crucial to developing a great economic situation, leading to a better quality of life. 

Saving allows a person a comfortable and fun lifestyle, whereas people who spend (often overspending) can have later difficulty affording, such as when credit card bills come due. Someone who saves can splurge whenever they like while simultaneously not needing to worry about heavy financial consequences. Saving encourages a stable lifestyle where you will not suffer the risks of being without money in your bank account. When people save, they have money to fall back on when needed. 

Additionally, saving gives financial flexibility for any emergency that emerges in one's life. This lowers stress during stressful events, as you will no longer have the headache of dealing with unexpected circumstances and financial burdens simultaneously. Instead, by making good economic choices, you can prioritize unforeseen circumstances without worrying about the inability to afford the solution. 

Along with this, you will not need to depend on others economically, being able to afford to take care of yourself and those around you. While spending can be a lot of fun at the moment, saving is the smarter financial decision and lifestyle one will not regret. It is always wise to have money for stability and comfort; when life gets tough, you will be prepared!

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