Finding Balance Between Spending and Saving

Life is short, and you want to live it, but you also need to save enough money for your future. It can feel overwhelming to balance spending and saving, so you cover all your bases.

Here are five ways to give you peace of mind and help you find the perfect financial balance to enjoy life and protect yourself financially.

Create a Budget

No one should operate without a budget. Make sure there’s room for paying bills, saving money, and spending money in your budget. Everyone deserves some ‘fun’ money, or you’ll burn out fast.

For example, the 50/30/20 budget allocates 50% of your income to fixed/necessary expenses, 30% to ‘unnecessary and fun’ expenses, and 20% to savings and debt payoff. So figure out the perfect percentage for your budget and make it work.

Save for Fun

Savings doesn’t just have to be for retirement or to buy a house. You can save for fun things like vacation, a girl’s weekend, or even a staycation. Create a vision board and set up savings accounts to put money aside for those visions. Then, let your hard work pay off!

Adjust your Spending

If you have a month that you overspend or went over budget, make up for it by cutting back the next month. Don’t beat yourself up for overspending and enjoying life, but make sure you can make up for it by saving extra the following month.

It’s all about balance. You don’t want to deprive yourself, but you shouldn’t go overboard and run your finances into the ground.

Don’t Use your Credit Cards as an Extension of your Income

Using your credit cards to spend more money can be tempting, but don’t be tempted. First, make sure you’ve saved the money you will need for living expenses for the month.  If you don’t have the cash to buy it, don’t do it. Instead, plan to save for the item or event and pay cash for it so you don’t find yourself in over your head in debt.

Pay Yourself First

We’re all conditioned to spend then save. What if you flip-flopped it? Save first, then spend. This is easy when you set up automatic transfers to your savings account on each payday. This takes the thinking out of saving and ensures you reach your financial goals without spending everything, leaving nothing for savings.

Final Thoughts

Creating balance between spending and saving is important for your finances and mental health. Being able to enjoy life and spend the money you work so hard to make is important. Set boundaries for yourself and have some accountability. Work with a professional financial advisor to ensure you’re on track to reach your goals but can still have some fun. Life isn’t about all work and no play, but having a certain level of responsibility ensures you’ll meet your current and future financial needs.