You’ve probably heard of the great steel titan, Andrew Carnegie. But, if you were to visit his final resting place in Sleepy Hollow, New York, you might find his burial site to be quite underwhelming. Carnegie’s simple Celtic cross feels shockingly modest compared to the massive marble Rockefeller mausoleum just up the hill in the same cemetery.
Andrew Carnegie believed in his core that “those who die rich, die disgraced.” He was a huge believer in giving away all of your money before you die. That way, you can see the positive effects of your giving while you are living!
Charity aside, there’s also a strong case for spending and enjoying your hard-earned dollars while you’re alive. Most people trade years of life to work and build their retirement funds. That money is well deserved, so it should be spent, right?
Should You Spend All Your Money Before You Die?
Here’s the thing: No day is promised for you or your loved ones. And the same goes for your health – it’s never guaranteed. You could work to save up a $2M retirement nest egg and die the next day. You could put off your dream travel plans until retirement, only to find that you aren’t healthy enough to get on a plane. I don’t say this to be a total bummer, but it’s an important reminder that you need to make sure you are living your present life to the fullest!
On the other hand, you also need to ensure you’re handling money in a responsible way. Spending all your money before you die doesn’t mean making YOLO decisions and blowing all your cash on wild weekends in Vegas because you “could die tomorrow.” You need to be able to support yourself financially in retirement. You may even live longer than expected – we certainly hope so! And what about amassing a legacy to pass on to your children?
The real secret is finding balance. Saving for tomorrow (but not too much), and living for today (but not too much).
In this post, we’ll cover spending all of your money before you die, and whether or not it’s a noble belief you should adopt.
Dying with Zero: Pros and Cons
Trying to spend all of your money before you die has some positives, but also some downsides. While it’s important to use your money to live your life to the fullest, you also need to cover living expenses today while simultaneously saving for the golden years. Here’s what you should look out for while deciding whether or not you should aim to die with zero.
The pros of spending all your money:
On your personal finance journey, it’s easy to turn all of your focus towards building that massive retirement nest egg. But sometimes spending more money now, even if it means saving a little bit less, can enrich your life massively!
You can see the effects of your generosity
Sure, leaving some money to charity after you’re gone is better than not being charitable at all. But wouldn’t it be nice if you could live to see some of the good your money can do?
While I’m certain your favorite charity would accept that lump sum of money once you’re six feet in the ground, your favorite nonprofits need money now. Why wait to help make your community a better place? Plus, being generous helps us to develop a healthier relationship with our money in the present. It can be easy to only focus on ourselves and building wealth, but routinely being generous can help to remind us of the bigger picture.
By the way, you don’t have to only give to charities to be generous. You can practice generosity in your everyday life by spending a little bit of money on the people you love too. Picking up the tab for a friend can help to strengthen your relationships, and spending the money on experiences with friends and family can create core memories that you will all remember for the rest of your lives.
Your health won’t last forever
I’m not saying that once you turn 60 you’ll crumble away into dust. But, you might have a few aches and pains that weren’t there before.
There’s a chance that backpacking through Europe will be just as easy for you in your 60s and 70s as it was in your 30s. But let’s be real. There’s a greater chance that it won’t be.
If you’re healthy now, spend the money and do those activities while you can. Continually putting off the things you’ve dreamed of doing creates the possibility of never having the chance to experience them. It’s worth spending a little extra money to do the things you love now. When you’re on your deathbed, you treasure memories. Not the dollars in your bank account.
It can strengthen your relationships
Frugality is an awesome habit, but being ultra-frugal could start to hurt your relationships. For example, if you say no to going out with your friends too many times because you want to save money, or if you skip out on that family trip every year because you don’t want to take time off from work, you might not be invited the next time.
You don’t need to spend a fortune. But making a conscious effort to spend high-quality time with friends and family is why we’re on this planet. Spending a little cash here and there towards this cause, within reason, is always worthwhile.
Remember that you have limited time with the most important people in your life. Spending time with them will often be worth having a few hundred less in retirement if you can spare it.
Spend more time doing what you love
No amount of money has ever bought anyone an extra second of time. We all get what we get, and who knows how many minutes that will be!
However, spending a little money can remove some of the un-fun things in life so that you can spend more minutes on your favorite things. If you can afford it, eliminating your least enjoyable, time-sucking tasks can leave you with less frustration, and more time to spend with family and friends, or on your favorite hobby.
Now, it’s important to walk a line here, and not fall into lazy territory. Ordering Door Dash every night because you don’t feel like cooking will be detrimental to your finances (and health!). Not to mention, it’s not even that much quicker than just cooking something yourself!!
But, if hand-washing dishes every night after dinner for an hour takes you away from watching a movie with your spouse, it could be worth it to spend some money installing a dishwasher. Or, if you find that mowing your lawn every Sunday completely kills the momentum of your weekend, it could be worth getting the teen down the street to mow it for a few bucks. Just make sure you fill your extra time with something that feels meaningful and fulfilling to you.
Increase your everyday enjoyment
Last summer, the idea of “romanticizing your life” was trending across social media. And unlike most social media trends, I can get behind this one! The basic idea is to infuse more small joyful moments into your everyday life.
Sure, it’s important to work hard during your working years. But remember they make up a HUGE chunk of your life. Even if you retire early after just 15 or 20 years of work, you’ll still want to be able to look back on those decades of your life fondly.
As long as you’re saving at least 20% of your monthly income, it’s okay to treat yourself along the way. Spending your money and enjoying the rewards of hard work help you to squeeze every ounce of enjoyment out of every day. If splurging a little on fancy imported coffee instead of getting the Walmart brand is going to make you look forward to getting out of bed, I’d say it’s worth it. Just make sure you’re not treating yourself in every spending category, and focus that extra cash around the things that truly make you happier.
Having something to retire to
We were lucky enough to interview Wes Moss, the author of “What the Happiest Retirees Know,” on the show, and we learned a ton about what makes for a happy retirement. It turns out that to be your happiest in retirement, you need to have something to retire to.
You can’t just go from keeping your nose to the grindstone for 40 years and then expect to have an easy transition to retired life. In fact, many retirees end up returning to work because they end up being bored. They don’t know what to do with their newfound free time. That’s why it’s so important to spend time (and money) developing your hobbies now.
In his research, Moss found that the happiest retirees have on average, 3.6 core pursuits (think of these like hobbies on steroids), while unhappy retirees have fewer than 2. If you deny yourself the opportunity to explore and develop hobbies in your younger years, you may find yourself floundering in retirement.
If you can’t think of 3 or more hobbies you’re actively pursuing, try taking Moss’ core pursuit finder quiz. It takes under 2 minutes, and will give you a huge list of activities you might be interested in exploring!
The cons of spending all your money
Adopting a “you can’t take it with you” mindset can definitely help you to enjoy life more on an everyday basis. But when taken to the extreme it can start to have a negative impact on your finances. Here are some of the potential downsides to trying to spend all of your money before you die.
Can encourage overspending
Living for today might sound fun, but if you aren’t careful it can turn into a serious overspending habit. It’s easy to start out by intentionally treating yourself. But if you don’t check in with yourself every now and then it can snowball into unchecked mindless spending.
Mindless spending can destroy your budget, and impair your ability to save and invest for retirement. Sometimes it can cause a nasty debt problem. Remember, the goal of spending all your money before you die is to find a balance between enjoying your life in the present and preparing for the future. It’s important to practice mindful spending.
Less inheritance for kids
Spending more money on yourself means that there won’t be much left for your kids to inherit. Depending on your children’s financial situation (and your relationship with them), this could be a big negative for your family.
On the flip side, leaving little or no inheritance for your family might be a blessing in disguise! It’s estimated about 70% of inherited wealth is lost in the 2nd generation, and 90% in the 3rd. So if you don’t spend all your money, your kids almost certainly will!
Plus, it can actually be more helpful to help your kids financially while you’re still alive. On average, people are most likely to receive inheritance around 60 years of age. But by then, most of the important and expensive milestones (buying a house, further education, big travel experiences) may have already passed. If you have the money to help support your offspring in their 20s and 30s, even in smaller amounts, you’ll get to see the positive changes that money can have in their lives!
Side note: We always recommend folks reach money gear 7 before helping their kids financially. Giving them cash now won’t necessarily help them if it means they’ll need to support you in retirement. “Put your own mask on first” by making sure you’re crushing those retirement savings goals before helping your kids with money.
You could run out of money in retirement
By trying to spend all of your money before you die, there’s the possibility you could run out of money in retirement. Not good! Even if you have a decent-sized social security payment, it typically only covers about ~40% of a worker’s pre-retirement salary!
This is why the 4% rule can be such a good rule of thumb for retirement planning. It states that if you withdraw 4% of your retirement savings each year (adjusted annually for inflation), you’re highly likely to get through your retirement without running out of money. While you won’t die with 0, it’s a great way to ensure you don’t end up underprepared.
So is dying broke a good goal?
Spending your final dollar on the exact day you die is a romantic notion. It’s extremely unlikely, and almost impossible to plan for. Instead of taking this goal too literally, it might be good to just plan on spending “the majority” of your money during your active retirement years. That way you still have reserves if you live longer than you expect!
The real goal is to have a spending plan for all your money. If you live long enough to see that entire spending happen, great! If you unfortunately pass away earlier, you will have at least enjoyed the fruits of your labor while you were living.
The point of dying with zero means you’re not just trying to hoard money. You can’t take it with you when you die, after all. You earned it and spent years working for it. So why not make a reasonable plan to spend it!?
Tips for maximizing your enjoyment in life while planning for the future
As we mentioned earlier, finding balance between spending now and saving for the future is key. Regardless of whether you want to spend all your money before you die, here are a few tips to help you live life to the fullest now while preparing for the future.
1. Figure out how much money you need to retire
Before you go gangbusters on spending all your money in retirement, make sure you calculate exactly how much money you need to retire and live comfortably. Whether you calculate it using age-based milestones, the 4% rule, or the 80% rule, these strategies can help prevent you from saving significantly more than you need.
Saving up a little extra for wiggle room is a good idea here, but once you’re on track to meet your goal, consider sending that extra cash towards your other savings goals or hobbies!
2. Create a giving number
Don’t forget to be generous with your time and money – while you’re alive! The easiest way to do this without thinking about it is to simply designate a certain percentage of your income for giving. This removes the mental work of deciding how much money to donate every year.
And if you don’t have charities in mind right now, you can create a Donor Advised Fund. We love and recommend Daffy for this! You can invest in premade fund mixes, our create a fully custom portfolio and grow your charity dollars to the moon.
Remember, donating isn’t always about money, either. There are tons of ways to make the world a better place, like volunteering at local charities, or just by helping your neighbors, friends, and family in their everyday lives.
3. Be clear on your values in life
Spending money won’t necessarily make you happier if you’re just buying random stuff you don’t care about. Sure, you might get that dopamine spike from getting an Amazon package delivered to your doorstep. But just as quickly as you ordered that junk, you’ll forget about it, and those impulse buys will find themselves buried at the back of your closet.
If you want to truly enjoy your life now, spend according to your values. That’s what you’ll remember on your deathbed – the things and causes you truly believe in. Hobbies, travel, taking your kids out to get ice cream on a random Tuesday night, etc. Commit to spending more of your nest egg in ways that align with your values, and less on stuff that isn’t meaningful in the long run.
4. Consider your other goals
Even if you choose to adopt a die-with-zero mindset, remember that it’s okay to enter into more frugal periods of time to save up for other important money goals. For example, if you’re saving up for a big trip, there’s nothing wrong with trading your weekly date night out for a date night in a few weeks. Or if you’re saving up for a down payment on a home, you can consider switching to a bare bones budget for a few months to save up those final few thousand dollars.
Just make sure to celebrate once you reach that goal by treating yourself on the cheap. And then loosen up the spending reins a touch after you reach your goal too!
5. Enjoy cheap activities
Spending a ton of money isn’t a necessity to enjoy your life. You can also incorporate fun and frugal activities to spice things up. Try picking up one of these frugal hobbies, stay in shape with these frugal fitness tips, or take your partner on one of these 30 cheap dates!
The Bottom Line:
Since we don’t know exactly when our last day on earth is, it’s nearly impossible to spend all of our money and die with exactly zero. But an empty wallet on your deathbed is not the point… The real goal of dying destitute is to make a plan to give, spend, and enjoy your money while you’re alive. It’s about seeing your spending plan in action, and making the most of your time while living.
Once you’re on track to be financially comfortable in retirement, spend your hard-earned dollars on things that increase everyday enjoyment. You’ve spent decades of your life earning that money. Now it’s time to spend that money on decades of freedom, fun, and making the world a happier place to live.
