To Save or To Spend?

by Vinaya HS on April 23, 2006

in The Bangalore Blog,The SP Jain Blog

Thanks for visiting Capital Advisor. I frequently update this blog to cover various topics on personal finance such as investment strategies, financial products that you should buy and ones that you really should stay away from, financial calculators, emerging themes such as early retirement and financial independence, and much more. You can Subscribe through Email and receive new articles directly in your Inbox or you can Subscribe through the RSS Feed and receive new articles in your feed reader.

When it comes to money, there are two schools of thought – the old and the new. The old school of thought believes that “One should save for a rainy day.” Save for tomorrow even if it means you have to be frugal today. The new school of thought, on the other hand, believes that “One should live one’s life today.” After all, you don’t know if you are going to be alive tomorrow. So why bother saving for it? My only question to people who believe this is, “What if you live till tomorrow?” This new thinking is further exacerbated by the easy availability of loans in all forms. You can borrow money to buy a car, to buy a house, to educate yourself, to invest in the innumerable IPOs, to go on that foreign trip, or for entirely personal reasons (no questions asked!). You can buy just about anything on an EMI. Today’s youth have never had easier access to money.

In my opinion, it is prudent to save a fair bit for a rainy day. That, however, does not imply frugality. You should enjoy luxuries, but only those that you can afford to. I personally believe that loans are a necessary evil. Take a loan to enjoy a luxury only if you know that you can pay it back without resorting to frugality. After all, what’s the point in enjoying a luxury if paying for it means you have to think twice for your next meal.

What’s your take on this?




Thanks for reading this article. I'd love to hear your opinion. Please use the comments section below to share your thoughts. I frequently write new articles that also cover several other aspects of personal finance including credit cards, financial goals, health insurance, income tax, life insurance, mutual funds, retirement planning, and much more. You can Subscribe through Email and receive new articles directly in your Inbox or you can Subscribe through the RSS Feed and receive new articles in your feed reader.

{ 5 comments… read them below or add one }

Girish April 24, 2006 at 9:13 AM

Hi Vinaya,
A very thougthfull blog…
You need to spend on the reuirements.
and maybe once in a while for luxury…
But always have a thought for tomorrow..
If you are alice tomorrow how will you handle it…
Good luck for your new endeavour..
Regards,
Girish

Lucio April 25, 2006 at 9:41 AM

I beleive in saving for a rainy day…so sometimes I resort to frugality

Goldtop May 1, 2006 at 3:09 PM

Used to be that:
“Money saved for a rainy day,
Buys a smaller umbrella than it does today”
Ergo, inflation makes saving foolish.

Now, thanks to China and IT,
Tommorow buys a bigger PC/TV etc.

A win-win?

deepthi June 1, 2006 at 8:31 PM

loved your write-up. I think people now a days are so lost in competing with each other. each must have what the other person has. and the result? well, we all know. one should be wise in knowing what he or she can afford without breaking your bank.
enjoyed your blog.

Bharath July 31, 2008 at 10:18 PM

Hey can you please send me the Moodala Mane title song.

Regards
Bharath

Previous post:

Next post: