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Seriously, You Should Save Money in Your 20s

By Morgan Housel – Sep 22, 2015 at 4:05PM

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You won't regret it.

There's a thin line between informed contrarian opinions and people just trying to screw with your emotions.

Take this recent article, called, "If You Have Savings In Your 20s, You're Doing Something Wrong."

Oh, boy. It deserves a rebuttal.

The article begins with advice the author received from a friend. "Don't save money. Make more money," he told her.

She explains life before this moment:

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.

OK, young people should see the world, meet people, and learn new stuff.

But, two things.

  • If you can't enjoy time with friends without spending all your money, you're doing it wrong and your friends don't actually like you. People have been enjoying themselves long before $65 brunches were a thing.
  • The decision isn't between saving or not saving, but finding a balance between the two that lets you enjoy life while being smart about your future.

Now, here's a rebuttal to some of the author's points about not saving in her 20s. 

"When did our 20s start to feel like our 40s?"

Specifically around age 25, when your prefrontal cortex becomes fully developed and you're able to make better decisions about the future consequences of your actions. 

"What memorable experience does money in the bank give you?"

To think of a few ...

Waking up at age 63 with a sore back and saying, "You know what, I'm too old for this. Time to retire to Florida and watch House of Cards."

Getting laid off and not wondering how you're going to pay bills this month.

Giving your kids the same opportunities your parents worked their butts off to give you.

I imagine those will be memorable experiences.

"[Parents] want us to save because it provides us with a safety net, but that's exactly why we shouldn't. Their need for us to have a safety net is just a giant metaphor for the difference between our parent's generation and ours."

Another possibility is that they're sick of being your safety net.

"When you die, you can't take your money with you."

You probably won't die in your 20s, so don't spend too much time thinking about this.

"People who are saving in their 20s are people who don't set their sights high. They've already dropped out of the game and settled for the minor leagues."

This is actually a good analogy. Most major-league athletes go broke because their spending ambitions are so detached from their income reality. 

"Everything works out, and if you're smart, able and had a job once, you'll have one again."

The time between now and things working out can be miserable if you don't have savings. More than likely you'll rely on someone who did save money, and pay them a 20% interest rate.

"When you have something to bank on, you have nothing to reach for."

Other than savings. You can reach for your savings and use it to fund whatever you need or want.

"Those who don't plan for the future aren't planning for their death."

People who plan for the future aren't planning for their deaths either. They're planning for retirement, tuition, broken-down cars, a new roof, a broken ankle, and a million other realities everyone deals with.

"When you're saving for yourself, you're refusing to bet on yourself."

By saving, I'm betting that life's expenses won't perfectly line up with my bi-weekly paychecks. It's a bet with a 100% likelihood of paying off. 

"You'll regret the experiences you didn't take, the people you didn't meet and the fun you didn't have."

Another thing you'll regret is needing a new muffler and having to put it on your credit card or beg your parents for money. 

"When you care about your 401k, your life is just 'k'"

See if your doctor accepts this joke as payment when you're 82 and can't afford an office visit.

"Refusing to give yourself the luxury of enjoying your money negates the whole point of making it."

Money buys more than luxuries. One of the best things savings provides is control over your time, which is actually the best way to see the world, meet people, and learn new things. 

"We're not trying to live with safety nets; we're trying to live on the edge."

Good luck, young lady.

For the rest of you, for the love of everything sane, please save your money. 

For more on this topic: 


Contact Morgan Housel at [email protected] The Motley Fool has a disclosure policy.

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