Years ago, I had a job writing educational materials for 401(k) plan participants. "Pay yourself first," I wrote over and over again, as I encouraged readers to start contributing to their plans. It's a cliche, but it's still really good advice. By taking your retirement savings contribution off the top of your paycheck -- before taxes, before your bank account sees it -- the savings process becomes much less painful. It's (almost) as if you never "had" the money you've put away, and over time, you can build up significant wealth without feeling pinched.

That's why 401(k) and other workplace savings plans work for so many people. That's how many people who are good at saving get themselves motivated to save outside of their workplace plan. By paying themselves first, they're taking care of their future before doing anything else. It's sensible, reasonable, and downright Foolish.

But the phrase has always irked me.

Which self are you paying?
See, I never quite feel like I'm getting paid when I "pay myself" with a retirement plan contribution. I'm not paying myself, I'm paying some future self, some guy 25 or 30 years from now who may or may not need or appreciate the thousand bucks I just stuck into my retirement plan.

Sure, it's fun to invest that money, and watching the growth add up over time makes me feel all warm and fuzzy. And I know I'll be happy when I've got a nice big pile of cash to draw down when I'm 70 years old or whatever. But right now ... that money doesn't feel real.

And meanwhile, I'm down a thousand bucks (minus taxes, of course) on that last paycheck.

When "saving" goes bad
Being down a thousand bucks isn't bad, is it? I mean, there are lots of ways to save a little money here and there. The Internet has plenty of great ideas, such as buying 20 gallons of milk when milk's on sale, and freezing them, for instance. I could do that, but we'd have to clear out the big freezer, probably have to toss all those bags of fresh-picked strawberries my wife carefully washed and froze a month ago. I bet she'd get grumpy if I did that. I'd better keep looking.

How about this one: "don't eat out on vacations." Yeah, going to some exotic location and spending the week grocery shopping and cooking ... I could handle that. Or heck, I could just stay home and cook in my own kitchen -- I'd save even more that way. Why vacation at all? I mean, I could just sell my vacation time to someone else -- go work their job for them while they go to Fiji and cook themselves dinner or whatever. I'd probably be able to get a nice fee for that.

Which I'd save, of course.


Paying yourself first -- here and now
All kidding aside, saving for retirement really is important. And as I've said before, living below your means is one of the great keys to building wealth. But carrying it to extremes is ... well, it's extreme. We work hard at this earning-money thing, we deserve at least a little reward. So by all means, invest toward a well-funded future. But then take yourself out to dinner. A nice one, with wine or chocolate milk or whatever you like best. Heck, bring a friend -- or even your spouse. Pay yourself first.

If you can't help yourself and you want to put away even more money, I won't try too hard to talk you out of it. But remember that there are other things worth saving for besides retirement. No, I'm not talking about your great-grandkids' college education. How about a boat, or a big elaborate trip you'll remember for the rest of your life, or a cottage by the lake? What do you dream of doing? How can you make it happen?

It's your life. It's important to plan for the future, but don't get so caught up in it that you forget to enjoy the here and now.

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