A classic either/or question that comes up from time to time in client discussions. Based upon our own life experiences, we all tend to lean one way or the other as it relates to spending now or saving for later. As with many decisions in financial planning, I think we should avoid the extremes on either end of this spectrum.
Why Save?
I think the primary reason we should save some of our money for later is because it significantly reduces our anxiety and worry about the future. I firmly believe this anxiety exists in all of us to a certain degree and can be significantly alleviated by having a financial plan for the future. Without a plan, it’s impossible to quantify how much money will potentially be required in our later years so we naturally worry about it. For a financial plan to have success, we need to save sufficient assets to fund our retirement needs. If we can do that, no worries.
Why Spend?
“Life is uncertain. Eat dessert first” is one of my favorite sayings, and it’s true! Life is definitely uncertain. In order to live a fulfilled life, we must learn to enjoy the journey. To me, the F.I.R.E (Financial Independence, Retire Early) movement where you save 50-75% of your income is a little extreme. Saving to the point of misery misses the point. When you get to retirement, you want to know how to enjoy it. Besides, “life is uncertain”, right? Last year, I battled breast cancer with my wife, Shelly. That was rough, but now we are more focused than ever on living in the present.
My Answer: A Little of Both
I have counseled hundreds of couples on spending and saving over many years. By far, the ones who are most fulfilled and worry free are planning and saving for the future while simultaneously living a good life. To this you might say “yeah, sure, but they don’t have the same financial constraints and burdens as me”, and you would be correct. We all have our own unique constraints, burdens, and challenges, but those who are financially successful learn to effectively manage what they have towards a good life and a solid future. Income has less to do with it than you would think.
Are you looking to find the right balance in your financial life? We can help. We have the right tools, experience, and expertise to help you get to a place financially where you can live a fun and comfortable life AND not be worried about your future. Call us today.
