Today, I want to talk about something that's essential to maintaining a healthy financial life: the balance between saving and spending money. In our consumer-driven society, it's easy to fall into the trap of overspending, but it's equally important to avoid becoming overly frugal and missing out on the joys of life. The key is finding a balance between the two.
The idea is that spending money is bad.
The truth is, it's not. You're allowed to spend money as long as you have a plan. The problem arises when you spend money without any thought or planning. When you spend without a plan, you're more likely to end up with a lot of debt and financial stress. It's important to allocate a certain amount of your income for your expenses and stick to that plan. This way, you can enjoy what you love without worrying about going over budget.
My wife and I's thing right now that we choose to spend money on is vacations. We save diligently to be able to afford to take some nice trips every few months when she has a break from school. My wife is very busy in PA school so these are very important for us to be able to get away and take a break. So we have decided to make it a priority in our lives to make sure that we have money to go on some fun and small trips during her breaks.
Tracking your expenses.
This is more important than budgeting because it allows you to see where you're spending money. You can use a simple spreadsheet or an app to track your expenses. This will help you identify areas where you're overspending and where you can cut back. Once you know where your money is going, you can make better decisions about where to allocate your funds.
If you don't know where your money is going how are you ever going to know where you need to cut back on or where you can take money from? Maybe you are budgeting way too much money on one specific thing but you aren't budgeting enough for another. How are you ever going to know that without tracking your expenses? That is why I say it is more important to track your expenses before you ever thing about budgeting.
Give yourself money to spend guilt-free.
It's important to have a little fun money set aside in your budget. This is money that you can use to treat yourself without feeling guilty. However, it's essential to ensure this spending fits your overall plan. This means you should allocate a certain amount of money for fun things and stick to that amount. It's all about finding a balance between saving and spending.
As you heard in today's episode, both Kelly Sjostrom and her husband and me and my wife Rebecca give ourselves specific money that we are allowed to spend guilt-free. This is a great way to ensure that you don't have any kind of resentment in your relationship when it comes to money. Recently, I just bought a $1000 e-bike this was because of some thought saving and planning. But spending money like that out of the blue could easily cause some hurt feelings and some frustration from my wife. But because there is a plan in place and open money talks. A purchase like that is stress-free
Overall, maintaining a healthy financial life is all about balance. You're allowed to spend money as long as you have a plan, track your expenses, and give yourself guilt-free spending money. By following these simple steps, you can achieve a healthy balance between saving and spending money. Remember, it's all about finding what works for you and sticking to it. Good luck!
Find Episode 79's guest Kelly Sjostrom online -
Money Talk with Skyler Fleming
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Email me at moneytalk@skylerfleming.com