@Sean, I love your comments because they force everyone to really think about the issues at hand. And that’s exactly why I write this stuff.

Money is a form of value that people can use to get others to provide value to them. One of my points is that as a young adult I’m in a great position to provide value to other people’s lives, and saving for a time when I’m not in such a great position to create value.

Also I disagree with your clear differentiation between ‘materialistic goals and my ‘authentic experiences’ and ‘future options’ – ‘future options’ can be materialistic ones too; saving now will give me the ‘option’ to buy a sports car in cash (although to be fair it was more of headline to grab attention than a real material goal for me.)

You make a great point about how saving can change someone’s intentions and attitudes. I would respond that at least the ‘rich old miser’ has the option to stop counting his pennies and do something new (however unlikely that is). A poor old miser does not have that option.

I love your argument on how living to your means or perhaps a bit over can be an aspiration raiser -I’ve seen this in a number of my friends and as we’re all generally a bright bunch, it’s worked out well for them. Perhaps because it’s because I’ve also heard so many horror stories (admittedly 2nd and 3rd hand), that I’ve adopted a more prudent approach.

However to counter your counter argument (because it’s fun!), I would say that truly appreciating the power of compound interest actually makes you want to not only save but earn as much ‘extra’ money as you can because you know the effect it could have in the future. That said, there’s a whole other debate as to if you perform better at increasing your income if you are in a position of privilege or need -From a position of privilege you are not desperate and less likely to make risky or silly mistakes, but likewise there’s nothing like the drive to put food on your table to make you spend countless hours in the pursuit of money making opportunities.

@Andy. I feel I’ve got plenty of time to consider an endgame: what I’m wanting people to do now is simply to ‘start’ something; saving; thinking about their money etc. You did a great job at increasing your income though -that’s often the less popular side to personal finance but it’s what can make the biggest difference. Great work.

@Jon: I love that you were able to pick up on the conflict I felt personally as I was writing the article -the conflict between the Hedonic treadmill theory saying people’s happiness is generally a constant and my own belief that happiness is something like personal hygiene -something to be worked on every day.

The rest of your comment was spot on too, thanks for contributing to the discussion. I love how this blog is providing us with a forum to talk about stuff we never really would get to talk about otherwise.

@The other Adam -Wow, Adam, thanks for being so open on Magical Penny and well done on the saving. This is exactly the kind of comment that could prompt another reader to look into their own life and decide what’s important to them. And that’s exactly what this site is all about.
Thank you
…even if you are a…. jigsawer!

I gave up a job that was high pressure, but with great job advancement potential as I was not enjoying it, and it was starting to affect me in my personal life. I am now at a much more relaxed job. Ok, the promotion opportunities are far more limited, but I am happier in general. I have been able to enjoy my weekends with my family and friends because I’m not spending all the time thinking “God, I have to go to work on Monday…”

A bizarre consquence of that is that I have actually saved almost double in the 6 months here than I did in my old job. I am enjoying the more important (to me) social side of my life again, so I don’t need to try and fill it with nice new expensive things to “make me feel better”, which they never did.

Now, I am not against spending all together. I personally go on a lot of meals and night out, with family and friends. But that is because I find this makes me much happier than spending money on nice new flashy things. It creates memories that will last much longer (is there any way to talk about this stuff without it sounding slushy?). However, I will always try to put aside current wants for a longer term goal, which was to buy a house. The house purchase is nearly complete now, so then it will be saving for a wedding, then saving so I can help my potential children out when they leave school. Even now this is a much happier thought than all the possessions I could possibly own with that money.

I think it all comes back to the question “What do you really want?”. Ok Sean, saving for potential future options doesn’t really work for you. If you have no big future goal in terms of improving your happiness then of course it is better for you to spend your money on things that make you truly happy now, or to save for that big materialistic goal. And Mr Knight, I totally agree that if you end up and old miser counting your pennies then this is no way to live your life either. My grandad was much like that, and the sight of a small man wrapped up in his blanket next to his cheap little electric fire is not one I would wish on anybody. However, I think the main point that Adam is making is that it would be silly to live to my means buy buying nice new things, if I then can’t afford a trip to the lakes with my friends, for example.

I enjoy my job right now, but if it comes to it and I need more money I will move on or push for a promotion. But wouldn’t it be nice to think that I have saved up enough money so that I can do it when I want to, rather than when I have to?

As has been mentioned above, the Hedonic Treadmill is a nice idea, but does not (from Wikipedia’s limited references) seem to have a comprehensive academic history as yet, and is somewhat open to mis-interpretation. Granted, you may not be any happier on a day-to-day scale after some achievement or spending, but this could equally be as you have raised the bar to the next level of a desired attainment. This is likely to be a step forward in the grander scheme, and providing it hasn’t left your finances completely shot (where obviously, I agree with large amounts of your day-to-day advice i.e. credit) constitutes progress.

I would hate to think that by saving more now through being comfortable [I don't feel it is just me thinking this can imply [rut] in certain circumstances] I have prevented the immediate achievement of a goal necessary for me personal longer term progress. Obviously, saving can be another means to the same end, but not for everyone, and providing your finances are generally controlled the power to act works both ways. I’m happy to agree that both can be successful, but it is equally understandable why people want to make the most of their talents, qualifications and dreams when they are young, and why in our society (as I have said before and Sean mentions above) this is not always conducive to saving.

But obviously, none of the above excuses half-assed day-to-day financial managment, where I think we can all improve.

As ever your article is well worded, but what you miss out, and what I worry for you is the ‘endgame’. When it comes to spend those pennies will you be able to or will you be, as Sean states, the old man continuing to count his pennies?

Also, the only reason I am in a well paid job is because I lived to my means and entered a part of my life where I needed more money. The kick up the backside from my partner becoming pregnant meant I found a job which increased my salary by 96%.

Essentially, not always being comfortable can be a good thing.

Lets not mince words. Since the industrial revolution Western civilization has been a capitalist and materialistic society based around the exchange of goods and services in exchange for currency (and such models have existed for much of humankind’s time on the planet). Money is, by definition, for spending, whether that be now or in the future. You can’t take it with you when you die, and you’ll lose most of it in inheritance tax if you try (I’m personally in favour of the concept of a 100% inheritance tax, but that’s another debate). Honestly, saying that the entire concept of saving is about generating ‘authentic experiences’ and ‘future options’ doesn’t particularly wash with me personally. Much better to have a (materialistic) goal in mind and save for that.

The problem with the ‘future choice’ argument is that you’re meddling in hypotheticals and what-if scenarios. Whilst I’d agree that having money aside for the unexpected (a ‘rainy day’ fund perhaps) is prudent, you could easily be losing out on ‘authentic experiences’ by putting off until tomorrow what you could be spending today (as well as missing out on hard cash – ref. the car article). You could also be changing the person – you – who ends up making these ‘future choices’, getting into an interesting paradoxical debate. Do spending habits now dictate your attitude to life later on? Does the stereotype of the rich old miser sat miserably counting his pennies not sometimes ring true?

Turning to the ‘Hedonic treadmill’ (I’d like a membership to a gym with some of these, please ) there is a fairly valid counter argument. Living almost up to your means can actually be worthwhile and useful. Not only do you know where your limits are and what you can reasonably spend (and save), but it can also act as an aspiration raiser – you know that if you want to raise your standard of living then you’ve got to earn more money month-to-month, either by getting a better education, a better job or by having a great business idea. Is it a coincidence that many entrepreneurs start off in relative poverty?

Do I think society is too materialistic? Yes. Is it a crying shame that people these days judge you first by your possesions rather than by your attributes as a person? Of course. But until the Revolution comes, I’m thinking that these things aren’t going to change, and happiness will remain reassuringly expensive.