Are you saving your hard-earned cash?
Or are you splurging on the now?
So what?
Below are the benefits of saving:
- Have an emergency fund;
- Be prepared for retirement;
- Down payment on a house;
- Ready your children for higher education; and
- Afford holidays or other big purchases.
Below are the benefits of spending: - Protect your family with various insurances;
- Maintain or improve your physical and mental health;
- Buy or do things that bring you joy;
- Save time by paying others to do things;
- Get professionals to help you; and
- Afford high quality items that you use frequently.
This post is not about whether you should spend or save but rather about practical ways that you can spend and/or save. We lightly touch on the importance of balancing spending and saving. So – here we go.
Balancing spending and saving
There is no perfect solution for finding the middle ground between spending and saving. Many people are more towards one way or another. Either you’re inclined to spend now or to save up for your future and/or retirement. You will need a financial plan that is best fit for your lifestyle, wants, needs and values which I will save for another post. Balancing the two is important because the past determines what’s important, the present is what brings you joy and happiness now and the future is unknown.
Best ways to spend
- Buy things that lead to pleasurable experiences.
- Pay for things in advance such as holidays to remove yourself the pain of paying at the time of the experience or later if you used a credit card.
- Take your family and/or friends out to a nice dinner or help them pay for unexpected bills.
- Treat yourself to small things like a pint of beer after a long week of work, cone of gelatos with your partner and key chain with your name on it.
- Join a gym, start doing yoga or seek various therapists to improve your physical and mental health and feel better throughout the day.
- Rent experiences by hiring a sports car, staying in a nice hotel overnight or cruise down the lake on an electric scooter.
Best way to save
- Look for ways to save on big ticketed items by applying the 80/20 rule.
- Buy generic goods such as medicine, pantry staples and office supplies.
- Cut down on eating out and cook more to eat at home.
- Reduce on groceries by shopping at farmers’ markets.
- Make voluntary contributions to your superannuation.
- Sell items on Facebook Marketplace, Gumtree and eBay.
- Go on a staycation rather than a vacation.
- Borrow books, magazines and other things that your local library offers rather than buying them.
My experience
I grew up in a household that experienced financial difficulties. It’s a nicer way of saying that I grew up poor. It wasn’t until I started practising mindfulness and focusing on the present that I focused on spending money on things. I was solely focused on saving money as I placed more importance to the future and the future was always in the future. Always looking at the future became an obsession that made me lose sight of the present. Let’s just say that it led to some dark moments and caused pain and suffering to myself and those that are the closest to me.
What now?
- Are you spending or saving more?
- If you are spending, are you spending on things that matter to you?
- If you are saving, are you saving with the right mindset?
- Are you still having trouble balancing the two? Check out I Will Teach You To Be Rich by Ramit Sethi.