Not About Making Friends, It's About Spending Money

I see my friends struggling with this all the time, and from up close the decision to save or not to save really doesn't seem like a matter of economics. People approach it as a moral issue. My best friend Luke has been out of school and working for a year and he's always trying to save money even though he can't really afford to.

When I prod him about his attempts to save, he says he does it mostly because he'd feel guilty if he didn't. When he gets through the month and he's managed to save money, or when he becomes more resolute and insists he will save $500 this month no matter what, it makes him feel like he's responsible and a good person.

That's why I believe that saving money is a luxury. You give up whatever you would've spent it on in the near term, and in return you get a sense of self-satisfaction, along with the interest. We're still taught that it's virtuous to save money and sinful to borrow.

All the personal finance columns that encourage you to save in almost every circumstance go over so well because they confirm and support these widespread, deeply ingrained values.

When we're older and earning more money, saving it might make sense. But while we're young and closer to the poverty line, it's better to spend. Anyone who says you should sacrifice a good standard of living today for a great one tomorrow is being a financial idiot. Spend your money when you're young if you want to feel better; save it if you want to feel better about yourself.