Amid the economic slump, don’t feel bad about putting saving ahead of spending. In fact, it’s unethical to squander money you can’t afford to spend.

By Bruce Weinstein, PhD

You can’t blame the American consumer for feeling frustrated. After all, we’re caught on the horns of a dilemma: We’re supposed to continue spending our rapidly dwindling dollars to keep our faltering economy from collapsing altogether, but we’re also told to save as much money as we can to prepare for an uncertain future. What to do?

It’s impossible to do both of these things simultaneously, and I’ll argue here that placing the economy ahead of our own needs isn’t merely misguided. It’s unethical. Here’s why.

How to Rank Your Ethical Obligations

Your relationship to everyone on the planet may be represented as follows. Imagine a series of concentric circles. You occupy the innermost one. (Or, if you prefer, the Creator is here, and you are on the next level outside.) In the next closest circle lies your immediate family. The circle after that includes close friends. Progressing toward the outermost circle are, respectively, the people with whom you work, members of your community, your fellow U.S. citizens, and finally, everyone else.

It would be great if you could be all things to all people all of the time, but of course, this is ridiculous. Even when times are good, you must prioritize your responsibilities, and it makes sense to say that the closer someone is to you, the stronger are your obligations to that person. Thus, your duty to provide for your family takes precedence over your duty to provide for your friends. Those friends, however, have a greater claim on you than does, say, someone in another country you don’t even know.

None of this means that it’s wrong to donate your time, money, and effort to helping strangers in need, regardless of where they live or whether you have any common bond. Such actions are noble and praiseworthy. However, when resources are scarce, as they are now for many, not only could you not be faulted for choosing to allocate your limited dollars to those closest to you; you would be ethically justified in doing so (BusinessWeek.com, 2/8/07).

Thus, given the tension that appears to exist between contributing to our economy and protecting our individual financial interests, it is right and good to look after ourselves and our families first. For many, this boils down to placing a greater value on saving than spending—even if this means, in the short term, that with decreased consumer outlays, the economy may continue its steady decline.

Can’t Buy Me Love…or Happiness

There is something fundamentally wrong with an economic philosophy that requires people to spend money so that the economy will remain strong. Not only does such an outlook weaken our ability to save, but it is tied to the false idea that happiness is to be found in the acquisition of material goods. If this is where the deepest satisfaction lies, then the people with the most things would be the happiest, and those with the fewest would be the most miserable. In fact, people whose primary goal is the acquisition of wealth or things are among the least satisfied, because they never have enough. In fact, they never can have enough, because money has only instrumental, not intrinsic, value. It is good for what it can get us, and many of the things we use it for are luxuries.

Yes, our souring economy is a source of legitimate anxiety, since for many, the basic necessities are being threatened. But the bad news also presents a chance to reflect on what’s really important in life and whether money is as meaningful as we think it is. As President-elect Barack Obama and his advisers prepare for the transfer of power, let’s hope they consider ways of stimulating the economy beyond mandates for consumers to spend, spend, spend.

Is It O.K. to Be a Tightwad During the Holidays?

There is never a good time for a financial crisis, but this one happens to coincide with our most festive season, when we feel especially obligated to shop and spend. Surely we can temporarily overlook the value of saving and show our family, friends, and co-workers how much we care about them by giving them lavish gifts, right?

Wrong. It’s true we have an ethical obligation to express our gratitude to those we care about and who have helped us, but this expression need not take the form of things you have to buy. If you’ve just been or are about to be downsized or you’re in danger of losing your home, it would be wrong to run up your debt with a shopping spree, even if you have the most noble of reasons for doing so. You can’t (or at least shouldn’t) spend what you don’t have; we’re in the mess we’re in because too many overlooked this fundamental ethical rule.

There are lots of ways to say “thank you” or “I value our relationship” without spending money. How about spending time with someone? Making a small donation in their name? Writing—and I mean really writing, by hand—a heartfelt letter?

You have no reason to feel guilty for not giving holiday presents during our financially shaky times. Sure, traditional presents are great to give, if you can afford to. If not, it’s smart to avoid making a bad situation worse. We can always be generous of spirit, even when our revenue streams have slowed to a trickle—or stopped flowing altogether. (By the same token, of course, we should be understanding if we don’t receive the gift certificates or boxes of goodies we usually get from friends and colleagues.)

More than ever, we have to count every penny—but we should still give of ourselves to those who matter most.

Bruce Weinstein, Ph.D. is the corporate consultant and public speaker known as The Ethics Guy. He has appeared on “The Today Show,” “Good Morning America,” “Anderson Cooper 360,” “American Morning,” and many other national television shows.

Originally published on BusinessWeek.com  – November21, 2008