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Why I wish I'd never saved a penny
July 19, 2002

I have decided against saving. As a child growing up in the rural American south, I was taught the virtues of hard work and thrift. I recall my great-grandmother, born in 1900 and a survivor of the depression, repeatedly asking family members if they had "work." A look of relief would envelop her face when they replied positively. My family had low expectations. A job counted as success, and made savings possible.

When I was given money for birthdays and holidays, I heard the tired clich? to "save it for a rainy day." This made no sense. What was so special about rainy days? I would walk away wondering how the weather could be a barometer of fiscal prudence.

But rather than questioning, I followed their advice. I saved. I remember the thrill of seeing my bank statements as the money grew. I begged my mother to take me to the bank almost every day so I could monitor the progress of my savings. I remember the first time I received interest and had it explained to me. I thought it was wonderful. I could let my money sit there and they would pay me.

I embraced saving. I started working odd jobs for family and neighbours and kept adding to the pot. The thrill of seeing the ever-growing numbers became my addiction. While most kids played, I raked yards and worked as a babysitter. I wanted money.

I was raised in a single-parent household and money was tight. My mother was the breadwinner and we had to save to afford luxuries. If I wanted brand name products I would have to work for them. But I thought the notion of paying twice as much for a name was silly. So rather than using my earnings to buy fashionable clothes, designer shoes and the latest records, I saved. I was sneered at by my classmates for wearing cheap trainers and downmarket jeans to school, but I consoled myself with the fact that I was earning interest. That would show them. Some day that interest would make me rich.

I wish now I had bought the branded goods. The most I saved was $300. Where is it now? If I had not saved, perhaps wrapping myself in designer labels would have spared me a few gibes and made adolescence a little more bearable.

The point I didn't understand then was that money gets easier. Most people increase their earnings until their late fifties. What seems a great deal of money when you are young can be a trivial sum when you are older. To a 15 year-old, $1,000 is a fortune, but to someone in their thirties, it might be a week's wages. The pleasure now can be worth much more than the value gained later. The moral is: spend it while it is worth something.

My mother would sometimes throw caution to the wind and take me and my sister to a nice restaurant even when we could not afford it. I knew we would suffer for the rest of the month, but I focused on the thrill of the outing and enjoyed every morsel of food. It was exhilarating and we had fun together. Memories of the lean times are blurry now, but the memories of those occasions vividly endure.

During my final year of university I took out every loan and credit card possible to pay the (overseas) fees but, more importantly, I wanted to enjoy the experience. I had decided that I was going to make the most of the precious moments. I worked hard but I also played hard. No saving there.

There were times when the pounds wouldn't stretch far enough but rather than be miserable I would practise psychological Keynesianism, and spend my way out of a depression. It was imprudent, but I survived. Sometimes everyone needs to lift their spirits. I was not and am not yet in a position to save. I will when I can but I am not going to let that spoil the fun now.

I learned my lesson, but Gordon Brown has not learned his. Present pleasure is an attractive alternative to thrift. If you make saving less attractive to people by, for example, taking ?5 billion a year from their pension funds, do not be surprised if they respond accordingly. All the pious talk in the world about the value and virtue of saving is not worth tuppence compared to stolen pleasure.

Moreover, it is not savers who are currently praised for keeping economic growth on track. Consumer spending is now welcomed as economic salvation. The consumer is hailed as the Atlas on whose shoulders the world economy is supported.

For those who do save, in spite of all, the gibes continue. They are mocked for their lack of fiscal, rather than fashion, sense. The savers see their hard-won nest eggs dissipated to pay for retirement care. They see the non-savers rewarded by handouts which send the clear message that saving is for mugs. Spend today, it says, and the state will take care of tomorrow.

If governments really wanted people to embrace saving, they would stop punishing savers. Until they do so they must expect other people to make the same rational choice that I did.