Millennials are having a discussion on the importance of saving money, particularly for retirement, with this bit of insight from L.V. Anderson on Slate:

On Wednesday, Elite Daily writer Lauren Martin wrote an essay called, “If You Have Savings in Your 20s, You’re Doing Something Wrong.” Based on the title, you might guess that Martin is a middle-aged professional whose life experience has taught her it’s a mistake to prioritize saving money in one’s youth, and who wants to share her hard-earned wisdom with the millennial generation. In fact, Martin is a twentysomething without savings who feels confident making assertions like, “When you’re 40, you’re not going to look back on your 20s and be grateful for the few thousand you saved.”

As somebody who happens to be 40, I’d suggest that Anderson’s most perspicacious suggestion is that the best approach to savings will depend on the person.  The important thing is to do things consciously and with as much information and consideration as you can muster.  For one thing, that will help you make better decisions, but perhaps as importantly, when you reach my age (or older… it’ll happen) at the very least, your predicament will be the result of making the best decisions you were able to make at the time, even if they weren’t very good.

Obviously, the first consideration is that it makes sense to save young.  At a 4% return, a dollar saved now will be worth $1.48 in 10 years, but $4.80 in 40 years.  Also obviously, the other side of the scale is how much a dollar is worth to you right now.

If I could, right now, have the $12 or so from investing the money I spent on every fast-food meal 20 years ago, plus the $7 or so from investing the money I spent on every pack of cigarettes I smoked back then (which would be around $2,400 from having stopped one year of smoking), that would be wonderful.  On the other hand, given increases in income, each dollar I have right now is arguably worth less to me than it was, then.  And other things can be seen as investments without being easily translatable into money, whether children, software, or tools.

I’d even go so far as to suggest that people should be sufficiently self aware to address psychological needs.  Having found myself addicted to cigarettes, it was a valid question, at any given point, whether the battle of quitting would have disrupted some other activity that turned out to be critical.  Likewise, it may indicate weakness or immaturity deserving of work, but if some indulgence keeps you from giving up hope or being depressed, then it isn’t wholly wasted money.

As I’ve been saying a lot, lately, the most important thing is to foster a society in which people can take the actions that they believe to be best.  Government incentives to “invest” in college, homes, or savings can just distort the market, assuming that those priorities should apply universally over a diverse society with people in very different circumstances.