This week, we discuss whether it's better to save for the future while you're young, or make the most of those years and spend how you like. The National's culture editor Ashleigh Stewart debates with assistant features editor Evelyn Lau.
Evelyn Lau: I feel I've been pretty good with money in the past few years but I'm still held back from saving due to an issue that many Americans my age suffer from: student loans. I've tried to live frugally and I've made enough forward payments on my loans to be in a better place than I was a decade ago and can relax slightly. As I go through my thirties, isn't it time I get to spend a little on myself and enjoy my life?
Ashleigh Stewart: Don't get me wrong, I advocate enjoying your money while you can – my love of six-month holidays are testament to that. But after growing up with nothing, I've long got by with very little without making a conscious effort to do so. I can go without a fancy dinner or several coffees a day, but I will drop a lot of cash on experiences. I want to shore up money while I'm young, to put it into investments and houses, for example, that mean it's working for me through passive income – and then free up my spending when I have several income streams.
EL: That's impressive. I'd love to be able to do that, but I feel as though it's just not possible. With the current crisis across the world, it makes me wonder whether there's even a point in focusing financially on the future when we don't even know what it might hold.
AS: It's a good point: if I got hit by a car tomorrow, sure I'd have some assets, but maybe I would have some regrets about not living as freely and easily. But I'm also not depriving myself. I'm simply making smarter and more conscious decisions around frivolous spending. Does spending without thinking about it make you happy?
EL: Sometimes. When I was younger, spending money would stress me out. I don't really budget and when I make big purchases I think about it for quite a while. Recently, I was debating moving from a one-bedroom to a two-bedroom villa with a Dh15,000 price difference in rent and, even though I can afford it and I do need more space, I needed some convincing.
AS: Buyer's guilt is real. I once left a brand-new iPad unopened in my wardrobe for a month because I was so ashamed at the unnecessary purchase. That is ridiculous when buying a house didn't stress me out nearly half as much. I think it's a debate between need versus want, don't you?
EL: Absolutely. I guess that's the hardest part. Do I need to book a massage or a staycation? Of course not. But I also don't want to deny myself some joy now I have a bit more financial freedom. For example, nowadays I will go out to eat at a nice restaurant, something I wouldn't have normally done in the past.
AS: But what if you didn't go out for dinner each week and you spent that money on a house deposit, which will then make you free money when you get renters in? Once you've done that, you can go out for dinner every week with that free money. Does that appeal to you?
EL: Oh, it definitely does, but I just don't see that as something I can accomplish. Plus, I'm not married and I don't have children, so I'm in a decent place to enjoy my money for myself.
AS: Sometimes I do think: why have I saved so much money to eventually share it now I am married, rather than being more selfish? But at the end of the day, what's mine is mine. I want to have the freedom to take some time out from work at some point and not care about an income. You can only do that with a nest egg behind you, surely?
EL: I get it, I do. I think that's the dream for many, but I don't think, realistically, most people can get to that point – even if they live frugally. I'd rather enjoy life more in my thirties and worry less about my finances. Maybe it's irresponsible, but with everything that's happening in the world, I feel now more than ever our focus should be on the present.
AS: I disagree. I'm a journalist and have always been, but it's not exactly a lucrative career and my parents have never been in a position to help out. Yet I've always managed to save in some way, even a little. That allowed me to buy a couple of houses in New Zealand, where I'm from. It sounds pretentious, but I really believe that even a little bit here and there can help. That mentality of "I can't" just isn't an excuse. Sorry for the lecture, Evelyn.
EL: But it's not simply a mentality. It depends where you buy property, but in many parts of the world there are people who can't afford simple housing to begin with. In the US, which is where I would look to buy, it can be a very complicated and costly process.
AS: There are always people with extenuating circumstances who simply cannot save, for sure. But for those of us who are able to actually make financial decisions for ourselves, why not at least try?
EL: I agree that people should make an effort. But should we take the joy out of doing something in the hope that something better awaits in the future? I'd rather live in a bigger space now because it'd make me happier rather than stay in a smaller one and hope that someday I can afford a house.
AS: We'll agree to disagree, then. So long as I live to the age of about 55, I'll hopefully be nice and smug in my mansion. Until then, you can gloat.