This is the second post in our series on balance, so if you missed our previous post on balance, check it out at: Balancing your life part one work. This week’s post is all about balancing your spending.
AJ: Some people say “you have to spend money to make money” and while that certainly doesn’t apply to all aspects of personal spending, there is a grain of very relevant truth there.
Balance investing vs. spending
KJ: The typical trade-off most of us try to balance is the difference of ‘should I spend money now’ or ‘should I set it aside for later,’ but sometimes, it’s a matter of ‘should I spend it now FOR my future.’ What I mean by this is that at any given time in our lives, we should look at where our dollars are best spent, and not all that infrequently, your dollars might be best suited for spending by investing in yourself while other times your dollars might be best used by spending them on projects (DIY or contracted out) around the house. It’s important to look at where your next dollars are best spent, but keep in mind that the answer won’t always be the same. Sometimes, your best opportunities might be to invest in the markets (ex. for retirement), other times it might be to invest in yourself through further education or job skills to get a higher paying job/raise/promotion, and other times it might be appropriate to spend those dollars in home improvement projects. When thinking about how to invest or spend your dollars, try to imagine the costs and potential benefits each path might take. At this stage in your life, it could be an all-or-nothing scenario or it could be a scenario where you can do parts of many goals at once (retirement, education, mental well-being with more functional living space, etc). Just keep in mind some of those non-monetary benefits when planning for your future and balancing where your dollars should be spent (or invested).
Balance spending to make your life more enjoyable
AJ: I know SO many working couples who are extremely frugal in exchange for having a full-time cleaning service for their home. Ultimately, the reward of not having to spend their time at home cleaning up after themselves and their kids on an ongoing basis is worth more to them than a few nice dinners out or a weekend getaway. I personally think that a lawn service in Texas in the middle of July is a very worthwhile expense! Sometimes the overall good that an expense can bring your life far outweighs the actual financial implication. You can’t realistically afford to always choose the easier path, but every now and then it’s good for the soul. We each have things we don’t want to do (or maybe dread is a better word), so consider the possibility of hiring the work out and what that could mean for your overall mental well-being and if it could spill over into better spent family time or more productive work time.
Balance spending to invest in your (non-career related) future
AJ: This is fairly straightforward for us at this point in our lives. In order for us to continue to build our lives together, purchases like a larger home and more fuel-efficient vehicles make sense. We might not truly end up making money off the home and we certainly won’t end up making money off the vehicle in the long-term but for our current lives to run more efficiently, there are things we need to spend on to pave the way for our future together. If making a cross-country move will result in happier lives for your family further down the road but will cost in the short-term, find a way to make the situation work in exchange for the better life you desire.
Balance spending just to spend
AJ: I was previously one who had a tendency to spend for the sake of being able to. While we had an agreed upon shopping budget that I (almost) always stayed within, I without question did not need the majority of what I was purchasing. I would buy new clothes because I was feeling fat or because it was on sale – and it was typically something I didn’t really love. I know many people do this with their kids in the form of purchasing things they think will make their kids happy whether they need them or not just because they’re able to.
Whether your ultimate savings goal is to build up a hefty nest egg for retirement, to pay for your children’s college education or just to have a security blanket in case of emergency it isn’t absolutely out of the question that we may all fall on unfortunate times and might not be able to spend like we once comfortably could. My New Years Resolution of eliminating all shopping (excluding things for our home and personal care that are absolutely necessary) has been incredibly challenging. I’m still thinking about a vest I wanted to buy while on vacation that I walked away from. I can literally picture the multitude of outfit combinations I could create with it right now! However, not spending that on something I really can live without will ultimately make some expense I absolutely need to take care of slightly less painful (like new tires, a new fence, or something else super not fun but necessary) which is the trade-off we have grown to appreciate in our house. Identifying areas in which you are spending without real need or want will help you when a time arrises wherein you need to “trim the fat” so to speak. Without knowing where you are spending a little, unexpected burden of life may feel far more crushing than it should be. Prepare for the need to be flexible.
- How do you balance your spending?
If you had to identify one area where you could “trim the fat” in your spending, where would it be from?
Tell us about how you make it all work.
Again, if you missed our previous post on balance, check it out here: Balancing your life part one work.
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