How spending now leads to a richer retirement

Generations of financial advisers and personal finance columnists have shouted the same plea: Save as much as you can! You'll need the money when you're old!

But you might want to spend some of it, too.

Author and Certified Financial Planner Carl Richards is all for responsible saving, but he also has some seemingly inconsistent advice for responsible people hesitating at the thought of digging deep to pay for a potentially meaningful experience: "Spend the money! " Richards said in The New York Times. "Then, do it again. And again. And the next time? Spend the money!"

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Richards, author of The One-Page Financial Plan, said he is always impressed by what great value he gets whenever he spends big on a trip or other fleeting but enriching experience with family or friends. "Life experiences give you an incalculable return on investment. Every. Single. Time."

There was a time when such contrarian life coaching would have fallen on deaf ears. "Millennials highly value experiences — concerts, yoga festivals, French lessons, surf lessons, palm readings, trips to Italy — and they are increasingly willing to fork over more and more money to get them," observed Brittany Lyte at Kiplinger.

Lyte cites a 2015 Eventbrite study finding that 78 percent of millennials would spend money on a desirable experience before they would shell out for a possession. Fifty-five percent said they were spending more than ever on events and experiences. And the spending paid off: Eight in 10 said their best memories were connected to a live event.

"More than stuff, experiential pursuits promote greater happiness, psychologists have found," Lyte wrote. "Perhaps painting lessons, bowling clubs, and a little international travel might also hold the key to a happy retirement."

Provided, of course, you don't go overboard. "Pleasure's consequences don't discriminate," said Peter Dunn at USA Today. "It can crush your financial life if you make $30,000 per year, just as it can if you make $3 million per year."

Call it what you will — "entertainment, leisure, luxury, blowing off steam, vacation, or even 'fun money,'" Dunn said. If you spend regularly on "things and experiences," you might find the pleasure you derive from the spending diminishing. Then, you might "crank it up and exacerbate the problem by spending even more," he warned.

As in all things, it's important to strike a balance. As Dunn put it: Eat everything on your lunch tray before gobbling up the cookie. Save what you need before going out and spending what you can.

Data from the Federal Reserve's 2013 Survey of Consumer Finances showed that the median retirement savings for families of couples in their late 30s was around $67,000. Fidelity recommends that you have six times your annual income squirreled away by age 50 if you're planning to retire at 67. That means you need to make sure you're slowly but surely building a nest egg.

Think about what you want out of life. It would be great if the whole family could go to Mexico and take a crash course in Spanish; we'd all love to visit Iceland and see the Northern Lights; you've always promised yourself you'd learn to surf one day … but wouldn't it be smarter to save the money for retirement?

Well, maybe, if you stick to straight math. You'll be able to buy food and pay the electric bill with the savings some day, and the photos from your European excursion won't pay for a cup of coffee. But it's not that simple, Richards explained in the Times. "Each time I try to do this kind of math, I always run into the same problem. Experiences are incalculable. Invaluable. Priceless. So no matter how hard I try, I just can't get them to fit into my calculator."

So put away the calculator and go with your gut. If the thrill of the experience or knowledge gained from an adventure is going to be worth it — really, truly worth it — then go for it.

"Because it's not just money you're going to need in the distant future," Richards said. "You're also going to need a lifetime of priceless memories and invaluable experiences to remind you what a great life you've lived."