Save Or Spend? Why Not Both?

No one who is committed to financial well-being would deny that savings is part of the plan. But do you deny yourself adequate spending on the here and now to meet those future goals? People who advise young couples, in particular, spend time in discussing the issue.

Striking a successful balance between spending now and saving for the future depends to a large degree on having a thorough understanding of your earning and spending habits.

If you want more money either to spend now or to put toward the years ahead, it has to come from the resources you have. You must understand your current spending habits and practices if you want to make an adjustment in either category. Check your weekly spending. That’s easier than making a monthly check and makes it easier to implement changes if need be. See if there are areas you can trim spending in favor of savings, but without sacrificing essentials.

Analyze your wants and needs and decide where your priorities lie. The more clear you are about what you want to accomplish with your money, in both long and short terms, the easier it will be to say “no” to temptations to overspend. For instance, if what you really hope to do in the long haul is travel as a couple, it will be less difficult to bypass eating out. Rewarding yourselves with an actual trip after a period of economizing will make it worth the sacrifice.

To whatever extent possible, limit monthly bills. Things such as rent, utilities, student loan or other loan payments fall into the “must pay” category. Adding to this list by such things as buying a new car you want but don’t really need is limiting your ability to put money elsewhere, including savings. Committing money to new “wants” diminishes your ability to choose.

Automate your savings to meet current and future goals. Having savings automatically withdrawn from your paychecks reduces the temptation to spend the money. Direct deposit also gives you the option of setting up separate savings accounts for different purposes. You can more easily see the progress you are making toward certain goals. Over time, as your pay increases, you can put a portion of each additional amount into savings. That should satisfy your appetite both to spend and to save. Ditto cash gifts. Bequests and other unexpected windfalls you might receive.

Allow for a little spontaneity. Build it into the budget if necessary, so that if you decide on a little splurge, it won’t make a difference to your long-term goals. A soul-satisfying spree now and again makes careful budgeting more satisfying.