British merchant Daniel Edwards was feeling a little constrained.

He had recently returned to London from an extended stay in Turkey. Visitors, eager to reconnect, regularly showed up at his home unannounced. The merchant’s schedule flexibility suffered as a result.

So his servant, Pasqua Rosee, devised a solution. In 1652, he moved Edwards’s daily coffee service to a small stall in nearby St. Michael’s churchyard. In doing so, he made coffee publicly available in England for the first time.

That coffee stall, centrally located near the Royal Exchange, quickly “became the go-to hub” for all of London’s merchants. In fact, Rosee soon replaced the stall with a coffee shop across the alley to accommodate more customers.

As a result, men now gathered each day “around a long table …to talk business, but also to discuss news, politics and ideas.” “That mixture of news reading, discussion, [and] sharing of ideas [was] absolutely crucial to the rapid spread of the coffeehouse during a period of a rapid rise of knowledge,” University of London professor Judith Hawley says.

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In 1989, sociologist Ray Oldenburg coined the term “third place.”

A third place, as Inside Higher Ed details, is a “place that is outside home (first place) and work (second place) where people gather and interact.” Third places, the Project for Public Spaces adds, “Host the regular, voluntary, informal, and happily anticipated gatherings of individuals beyond the realms of home and work.” Oldenburg includes “beer gardens, main streets, pubs, cafés, coffeehouses, [and] post offices” among the potential third places that form the “heart of a community’s social vitality.”

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Yet, less than 375 years after Rosee’s pioneering coffee shop, communal spaces no longer factor as prominently into our lives.

As housing in dense, vibrant areas has become less affordable, we’ve given up easy access to this dynamic, multi-purpose place. Instead, many of us now direct our time and money towards private leisure and socializing.

Until recently, architecture critic Kate Wagner explains, middle-class houses typically contained only three “domestic zones.” Your house would have a kitchen, a living room, and bedrooms. But the average U.S. home has increased in size by nearly 1,000 square feet since the 1960s. And much of that extra space functions to create a fourth zone, for entertaining.

This trend, Wagner writes, reflects the “increasing social alienation and distance from urban centers caused by decades of sprawl.” And such a “profound shift in American life [has] necessitated the internalization of communal spaces — bars, gyms, billiard halls, and the like — into the home itself.”

We’ve lost, in journalist Bruno Manno’s words, the “opportunity structure” to meet new friends, encounter new ideas, and have new experiences.

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Our money increasingly lacks a third place, too.

We have a well-established “first place” in our financial lives. Like a home, we rely on checking and savings accounts for financial security and our daily cash flow needs. And in recent decades, we’ve cemented a new second place: tax-advantaged retirement accounts, such as a 401(k). Like an office, this government-sponsored place give us an outlet to work toward long-term goals.

Yet, 401(k) plans have only existed since 1978. 

Less than 50 years later, more flexible investment accounts no longer factor as prominently into our lives. We’ve given up on prioritizing a dynamic, multi-purpose investment alternative. Instead, we direct much of our savings toward accounts that come with limitations and potential penalties.

And in doing so, we’ve lost the “opportunity structure” to use our money to create the lives we want. We’ve hampered our ability to save and spend our money in “regular, voluntary, informal, and happily anticipated” ways. At least, not until we reach a government-defined retirement age.

Ray Oldenburg wrote that, “The character of a third place… is marked by a playful mood, which contrasts with people’s more serious involvement in other spheres.” The absence of any “playfulness” also describes how many of us now save and invest.

We take our monthly cash flow and long-term financial needs quite seriously. And for good reason.

But many of us, without even realizing it, have taken those good habits to an extreme. As a result, we lack more “playful” investments. We’re willingly surrendering money that we might want to use before retirement. Essentially, we’re skipping over the next 5-15 years of our financial lives.

And at the potential cost of feeling financially prepared to plan an extended family trip, launch a new business idea, or take a work sabbatical.

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Understandably, you may feel like you’re making a mistake if you don’t max out every tax-advantaged investment account. But financial and life flexibility are often more important than a tax break.

A taxable, non-retirement brokerage investment account can serve as the valuable third financial place that we need in our lives.

Architecture critic Kate Wagner’s commentary on the current imbalance between housing and communal spaces reflects our approach to investing, too.

She says, “Owing to its distance from all forms of communal space, [our homes] must also become the site of sociality. It can’t just be a house; it has to be a ballroom, a movie theater, a bar.”

Similarly, we’re stocking away a lot of future joy and memories into only our retirement accounts. A 401(k) no longer is just the source from which we’ll fund our daily needs later in life. It now also has to make possible our travel, new hobbies, and experiences with family.

If, like British merchant Daniel Edwards, your finances feel a little constrained and inflexible, you may just find your solution in a new third place.

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About the author: Kevin Mahoney, CFP®

Hi, I’m Kevin. I’m a financial advisor in Washington, DC. I’m also the founder of Illumint, an independent financial planning company in the District that specializes in financial planning for Millennials like you. I empower our generation with the confidence to invest an inheritance, financial gift, or extra savings. If you’re new to Financially Well, welcome – you now have access to the leading finance podcast for Millennials. I encourage you to read, watch, or listen to the ideas I’ve shared about making your money work for you. And then when you’re ready, please send me your thoughts & questions!