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Saturday, March 04, 2006


I want to direct you guys to this post by Kirby over at Kirby on Finance. He makes some great observations about striking a balance between saving and spending.

It seems to me that most personal finance blogs advocate lots of saving and frugality, and ultimately building networth. The whole point seems to be to reach some magic number by some arbitrary age, where one can then finally start living life to its fullest.

I'd just like to advise caution on that mentality. Life is in the present. I spent over $1000 on dining last month (mostly due to one meal at per se), and only managed to save a little. While I understand that that meal, had I invested it at a rate of x%, for x years (blah blah), would have become a ridiculous amount of money, I have no problem with it. In fact I think that meal was worth every dollar; I'll remember that meal for years to come.

Ultimately, it's about balance. You are trading present enjoyment for POSSIBLE future enjoyment by saving. Just something to consider while you put away money into your savings account.

EDIT: I hope no one gets the idea that I am suggesting you spend beyond your means. The balance that I am talking about is a balance between saving and spending. In no way does that mean NOT saving.


Blogger Jose Anes said...

Just posted an article with similar concerns in:
Money and Investing

Referenced your article at the end of my posting.

1:15 PM  
Anonymous Kirby said...

I think you do a better job of getting across my thoughts than I did! That post has really generated a lot of opinions going both ways and what I find interesting is how so people just fail to understand the balance that you must have in life. They assume that because most people will live to old age that they will and the concerns of growing old are paramount to those of today. What a wrong philosophy! They are important, but you've got to understand that today matters too! Besides, shouldn't you enjoy your "youth" while you have it?

11:54 AM  
Anonymous Kyle said...

Well stated. I went to Per Se as well and never in my life spent more on a dinner. But you can't put a pricetag on some things like experiences. I don't regret it and will never forget the experience. Some things I live for the moment, and save for the future on other things.

3:58 PM  
Blogger mOOm said...

I agree fully. I am just naturally frugal but I don't try to save just for the sake of it or cut down on minor things. Much better to develop ways of making more money. That is my philosophy. If you can find a way to become financially independent soon then go ahead I think. But people stuffing the maximum into their retirement accounts doesn't make any sense to me. My Mom has a high net worth and doesn't touch it. The government pensions she gets cover her living expenses. My father though was always worried that she wouldn't have enough to live on after he died (he was 15 years older than her) and tried to save all the time. Late in life his net worth was more than doubled from inheritance... So I agree very much on balance. I don't think all these people have such good perspective. Most seem to ignore social security in the US for example. Believing it won't be there or something. It may be less in the future for people younger than 50 and may eventually be completely reformed. But "bankruptcy" isn't the issue....

1:56 AM  
Blogger Madame X said...

I agree, the balance is key. I talked about this a bit in my Now or Later Rule.

8:52 AM  
Blogger Lord of the Land said...

I agree and there's no point in savings money if you are not going to enjoy life with it. But the reason other bloggers and writers stress savings so much is that for almost everyone the saving is the tough part. The spending comes easily.

Most writers I read tend to stress budgetting part of your income for savings and part of your income for fun.

So go out and have a good time. But don't do it at the expense of your future.

5:49 PM  
Blogger Wilks said...

I agree! Balance is key. And enjoying life is also important. I personally enjoy doing a lot free things. These are simply things I enjoy doing. Cooking while listening to music at home is one of my favorite things to do.

11:06 PM  

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