Make More Money or Spend More Time With Family?

A Thought Experiment

Should you work more to make more money or spend more time with family and loved ones?

This post applies to people who have a job and have enough money to spend a little extra. If you don’t have a job or don’t have enough money to make ends meet, you don’t have a choice; you have to do everything you can to provide food and shelter for your family. If you aren’t in that situation, read on.

Money has no value in and of itself. It is what you do with it. It can buy food and shelter. It can buy things you don’t need and things you do need. It can buy experiences, or it can buy more tangible things. For many people, having more money gives a sense of security. This is often the justification used for working into old age rather than retiring. However, if it sits in an account and grows, and you never use it, you may die with a lot of money that never had a chance to turn into something more valuable. See this post on the idea of Dying with Zero.

If that is what you want, then go for it. You may want your children to inherit it. Some would prefer to spend the money with their loved ones while they are alive. Money spent on experiences is converted into memories. My wife and I made a choice to buy experiences with our hard-earned money rather than things we may not need or appreciate later. Most people don’t think about these choices carefully. They just keep plodding along, making more money to spend on things or saving it for nothing in particular.

There are two times when you have a stark choice between spending time with your loved ones (spouse, children, and friends) and working to make more money: 1. When you are young, you choose between working longer hours and spending time with your family. 2. When you are older, you choose between working into old age and early retirement to be with your loved ones.

There is no question that no matter how much you love your family, you will need to take some time away from them and make some money. If you are in the prime of your working years, you will need to work hard to make enough money to live. You may need to work very long hours if you want to save to buy a house or take a vacation. Later in your career, you may feel you have to work several more years to save enough to retire. Where you draw the line on how hard to work and how many years to work before you retire is what I am talking about in this post.

During the working years and after you retire, how you spend your money plays a part in the equation. You will decide how much money to spend so you can enjoy quality time with your loved ones. Do you spend more on a vacation with your kids or use that money to buy a new car? After you retire, will you visit your loved ones once a year or every other month? Will you take them on a trip that they couldn’t pay for themselves?

Another question may arise when you retire—when to start taking Social Security. You get the maximum amount of money at 70. Full retirement age is 67, but you can get more if you wait an additional three years. You can start taking Social Security at 62, but you will make substantially less if you do so. This comes down to the same question: make more money or spend time with family. If you take the money early, you can spend it on experiences with your loved ones.

Suze Orman and most financial advisors recommend waiting until 67 or 70 to start claiming Social Security. They talk about the lifetime financial benefits of waiting. It’s a complicated question, and there is no right answer for most people. If you take the money at 62, you give up about 30%, but you start collecting five to eight years earlier than you would have if you had waited. If you can’t live on that 30% reduction, then the decision is obvious. But for those who could swing it with the reduction, the answer may not be obvious. Take the money when you are younger, or save it for when you are older.

Think of what you can do with the extra money if you take it early. You can regularly take your family to dinner. You can take your grandchildren to the zoo, or maybe even to Disney World. If you do that, you will have less money in your 70s and 80s than you would have had you waited. If you wait on the money, you will have more money in your 70s and 80s, but you may not have enough to spend the extra time with your family in your 60s.

In my experience, most people don’t examine this question closely. They decide they want to make more money and don’t truly examine the choice. I am fortunate that our grown son lives nearby. We live in Minnesota and could save a lot of money by retiring elsewhere. Florida has no income tax. The cost of living is much lower in the Dakotas and the South. The weather is warmer in most of the country. We stay in Minnesota because of our son and his future family. We also have other family in Minnesota whom we love. Should we save the money and go south, or spend time with our loved ones in the cold north?

If you are fortunate enough to have these choices, I have a thought experiment to help you decide. Let’s first talk about when you are in your working life. I could have worked more hours and made more money when our son was young. Instead, I never worked weekends, I was home every day by 3:00 p.m., and I took every possible day off. I spent countless more hours with our son than I would have had I worked more.

I was fortunate to have enough money without working additional hours. Still, I made the choice to give up making even more. What about retirement, now that he is grown? I retired at 55. Several of my colleagues whom I left behind are working past 70. Now, I have time to meet our son for coffee during the week, to go on more trips with my wife, our son, and his girlfriend, and to spend time with friends and extended family.

So, here is the thought experiment. How much of your money would you give to save the life of a loved one? It is a harsh question, I know. Most of you would give a huge chunk of your money, perhaps all of it. If I would give everything to protect my wife and son, why would I not give up earnings so I could spend more time with them? Why would I work longer hours for more pay unless I absolutely had to? Why would I work a few more years to have more of a nest egg when I could spend that time and money now to have meaningful experiences with them?

Don’t forget, you may decide that you will work a few more years to build up that nest egg and die or become disabled in those years. I am 57. In five years, if all is well, I will take Social Security. I will not wait. I can spend that extra money on trips with my wife and son’s family. If I wait, I may be gone or have a medical condition preventing me from using that little bit of extra Social Security I would have.

I have mentioned this thought experiment to others, and they say it’s unfair. It is not. It is not at all uncommon for people to die or become disabled while waiting for their Social Security checks to start. Why would I purposely give up the chance to be with my wife and son by trying to build a larger nest egg?