my two cents

How Much Should I ‘Invest’ in Myself?

Photo: Lambert/Getty Images

I feel caught between what people seem to consider “investing” in myself versus saving money for the future. I’m 27 and I feel like everyone is constantly telling me to do things that cost money now but will “pay off” down the road — buy expensive clothes that will last longer, take a business class because it’ll help my career, pay for therapy because it’ll help me be better at work and life in general, go to fancy exercise classes because they’re good for me. I also recently took a lower-paying job at a respected PR firm instead of a higher-paying one at a boring marketing company (which I mostly don’t regret), but I’m wondering where the buck stops. When do I get a return on this stuff, and at what point am I actually hurting my future by not saving anything (which I’m not)?

I, too, have gotten swept up in the idea that if I just “invested” more in classes and products and various other self-improvements then I’d become a more elevated version of myself, my good qualities amplified and my bad ones sloughed off. (Naturally, wild career and financial success would follow.) But that’s not really how things work. Still, I wouldn’t say that my money and efforts have been wasted, either. The truth is, I have no idea how well most of these “investments” have paid off. There’s no alternate reality, one where I haven’t spent thousands of dollars on education and professional-looking outfits, that I can compare myself to.

Then there’s the opposite scenario: I sometimes wonder if I haven’t invested in myself enough. What if, instead of spending my 20s in a cubicle, I’d gone to grad school? Sure, it would have cost a lot more up front, and set back my 401(k), but maybe I’d have a six-figure book deal by now. Or maybe I should get a career coach?

These mind games are part of being human. We’re all stuck in an endless line of questioning about what we might regret versus what we’ll be grateful for doing — risk versus potential reward. And while nobody gets it “right,” it is possible to make the process a little less haphazard. Ideally, you want these self-investments to be part of a larger plan. We may all be flailing toward an uncertain future, but you can still make some educated guesses about yours.

For example: It will definitely pay off to save some money. “Before you can grow your future, you need to protect that future,” says Amanda Clayman, a financial therapist based in Los Angeles who tells me that she coaches people in your situation all the time. “It also sounds like you’re feeling pulled out of balance by all these ‘good’ investments, which you’re making at the expense of other things you need to take care of in your financial life.”

So, do your future self a favor and free your brain space from these decisions by automating them. (All you have to do is set up a portion of your paycheck to deposit directly into your 401(k) or IRA every month, so that you never have to hem and haw about it. Then it’ll be done before you can question whether the money should go toward something else.) If you’re not used to saving anything, start small — say, put away 5 percent of every paycheck. Once that feels normal, ratchet yourself up to 6 percent, and then 7 percent, and so on. Eventually, you want to be putting somewhere between 10 to 15 percent of your paycheck into your retirement savings — especially when you’re young, because the power of compound interest is on your side.

At the same time, you also want to save some money for emergencies, and I recommend automating that too. (I use an app called Digit, which takes small dollar amounts out of your checking account when you aren’t likely to notice.) Your goal is to have enough cash squirreled away in a savings account — preferably one that you can’t easily see or access, so you won’t be tempted to “borrow” from it — that you could stay afloat for a few months if you lost your job.

I know that socking away all this money sounds boring and wasteful while you’re trying to jumpstart your professional life, but remember: “Saving for the long term is its own form of self-investment,” says Clayman. It also sounds like you’re uneasy with your current habits — “wondering where the buck stops” — and saving more will make you feel more confident with your financial choices in general.

Which brings me to your next point: How can you be better equipped to decide which self-investments are “worth it”? Clayman points out that you already have a pretty good tool at your disposal: your intuition. “I think the most important piece of it is listening to that little voice that says, ‘You know, this seems a little reckless to me. I feel overextended. I feel like I’m taking on too much risk,’” she says. “Especially when you work in PR or another field where social currency is prized, it can be difficult to tune into what’s right and good for you versus what’s true for other people.”

Clayman also suggests creating a more structured spending plan. “When you have a specific amount that you’ve budgeted for these self-investments, it gives you a framework for what you can reasonably afford, and that can be a real strength,” she says. “We tend to surround ourselves with those who tell us what we want to hear — ‘Yeah, you should buy that! You deserve it.’ But I really believe that money points us toward ways that we need to grow as people. And if you have a good handle on what exactly your resources are, then you can tailor your decisions to them instead of the other way around.”

I always find budgets really abstract, so here’s a trick I’ve learned to make them more concrete. Whenever I’ve had to make one, I’ve looked through my past spending to figure out where the money could come from. If I were you, I’d look at your past year of spending (it doesn’t need to be perfect — maybe just scroll through your credit or debit card accounts) and highlight all the charges you’d classify as “self-investments.” Which ones do you feel best about? Which ones could you have skipped? Add up what you spent on the ones that were most helpful and see if you can afford to spend the same amount on similar things this year — in addition to saving money, because now you’re doing that too. You’ll need to be more judicious, to be sure. But that’ll help give you context for what seems worthy of your money and how much it costs.

(Also, please budget for fun stuff, too. Trying to shoehorn every expense into some type of self-improvement justification must be exhausting.)

And remember, even when all of this does start to pay off, there will always be more. And that’s a good thing! Striving gives you an edge. But you want it to feel sustainable and interesting, not like one long, never-ending math calculation about what might increase your market value. It should also increase your options, not feel like something you’re forced to do. The minute you feel trapped or pressured into spending money on something, pay attention — that feeling is telling you something important.

How Much Money Should I Spend on My Future?