For those in debt, it’s easy to pass on purchases. When a $200 suit costs you $250 due to interest, it’s easy to see how much debt is hurting say, “I simply can’t afford it. My money could be much better spent on other things.”
But what about people who aren’t in debt? Let’s go one step further, if you have a healthy emergency fund, fully funded retirement fund, and have already put away money for other goals: how do you limit yourself from spending when you really can afford it?
Or do you splurge? If you splurge anything over your target savings goals, do you run the risk of lifestyle inflation and not being able to cut back when the money isn’t flowing as such a quick pace?
Some people say you can never save enough. Eventually you’ll get to the point where you have enough saved for retirement, but all along the way, you may be missing out on the things you really enjoy. And what’s the point of spending 30 years working hard and saving a ton of money if you never spend your hard-earned money?
Just like it’s easy to see why someone in debt can’t afford an expensive suit, it’s equally as easy to see why someone who has fully funded an emergency fund and hit all savings can. With all that money, why not enjoy some of it?
Having the proper balance is difficult. My advice is to hit the savings goals and then put in a little more and use the rest guilt-free.
Don’t try and put off purchases, don’t think about how much more you could save if you tucked a little bit more into each account. You’ve worked hard, you’ve been responsible in taking care of your goals, and now you have money left over. You’ve earned the right not to have to worry, not to have to stress, and not to have to think twice about your purchases.
Readers, how do you balance your savings goals while not being too constricting?