Jonathan’s Parting Thoughts: No. 6

Spare a thought for your future self.

Down the road, will we be happy with the financial decisions we make today? I think this question has four crucial aspects.

First, there’s the obvious: Will our future self be happy with the amount we’re saving each month? Every dollar we spend now is a dollar our future self can’t spend.

Second, when we borrow money, the loan may come from a bank or a credit-card company. But in effect, we’re borrowing from our future self, who will have to repay the money involved. How will our future self feel about forking over those loan payments?

Third, when we purchase a car, house, piece of art work or some other possession, we’re expecting our future self to live with these possessions and look after them. Will the person we become be happy with the choices we’ve made?

Finally, whenever we upgrade our lifestyle—flying business class, purchasing luxury cars, eating out more, staying at finer hotels—our future self will want that lifestyle to continue, and that comes with a cost.

A related point: One of life’s great pleasures is a gradually rising standard of living. If we stay at Motel 6 in our 20s and 30s, Hyatts will seem pretty darn nice in our 40s and 50s. What if we start staying at Ritz-Carltons in our 30s? After that, not much will seem special, and yet we’ll be loath to stay anywhere less fancy.