Balancing consumption & conservation - MoneySense

Balancing consumption & conservation

We may have been deluded into thinking money is an infinite resource because we’ve had unprecedented access to credit, but that doesn’t make it true.


Money — like any other resource — is finite. Since we only have a set amount of time during which to make money, and we hope to last well past our working lives, it only makes sense that we figure out what the balance should be between consuming our financial resources and conserving them.

Sure, dinner out a couple of nights a week makes the week a little smoother: it’s nice to get out or to order in when you just can’t think of what to cook or you’re just too tired to bother. But if you’ve got an $80-a-week restaurant habit, that’s costing you over $4,000 a year. Cut it in half, and you’ve got an extra $2,000 for the future. Invest that $2,000 for 30 years at 7%, and your conservation means you’ll have an extra $9,000 to eat later on. Do it every year and you’ll have almost $139,000. Food…check!

It’s much the same when it comes to choosing where we will live. It’s become de rigueur to buy a huge home fully equipped with every conceivable convenience. We want marble in the front hall and granite in the kitchen. Bathrooms aren’t just bathrooms anymore; now they are spas. It’s almost embarrassing to take someone from Europe or Japan through a typical North American home because we waste so much space. In the mean time, we’re spending so much on our mortgages that we don’t save a cent for the next chapter of our lives when a much cozier existence with money left over for simple pleasures like heat will really count.

Conservation isn’t as hard as most people think it is. It does take a little thought, and some planning. Maybe a little less itch-scratching. If you aren’t of a mind to conserve, what are you planning to eat when retirement finally does roll around and you’re left with a lot of stuff, but not much money? And how much of that stuff can you burn to stay warm?