Spending vs. Saving

by Guest Post

One of the most common questions people face today in the area of personal finances is whether it is better to enjoy your money today, or save for tomorrow.  It often feels like the experts are suggesting that you must choose one or the other and that there is no compromise.

However, this is not actually true and if you manage your money correctly and take advantage of high interest savings accounts and 0% deals on credit cards then you can do both.

So the idea that the two ways of living are mutually exclusive is not accurate. You can enjoy life and still put money into savings so that you build a safety net for the future.

After all, you have worked hard for your wage. Once the essentials of life have been paid, such as bills, you want to get some enjoyment from your money.

That is why at the end of the month, every restaurant and bar in the city is much busier than during the month. People have been paid and want to have a little fun!

On the other hand, when you put your hard earned money into some form of savings account, you will experience delayed gratification and reap the benefits in the future.

When you are in your 20s, 30s and even 40s, it can be hard to imagine life beyond work. You are busy juggling a job with raising a family and travelling.

The future probably seems very far away. If you don’t begin saving, however, when the future does arrive, you may be wishing you had been a saver as well as a spender.

Ask anyone who is retired how quickly time has passed if you need proof. When you retire without adequate savings, then the fun you had before will be a distant memory.

No-one wants to struggle in later life. We also live in a world that will continue to have uncertain economic times. There is no guarantee of employment anymore and health costs and school fees mount up.

If you have savings, you build security. You can be better prepared should any unfortunate circumstance arise. A road accident, a serious illness or the loss of a job can have financial implications.

The Huffington Post reported that the number of foreclosures in the United States was predicted to be around one million in 2010. It would not be a surprise if it were more.

Circumstance can change so quickly, it catches people by surprise. The knowledge that you have savings to rely on can give you a peace of mind that is so valuable. Using an international money transfer can help you take advantage of any overseas stocks, shares or income that you may possess.

With some sensible budgeting you can still enjoy today and build your nest egg for any future occasions, including happy ones! Perhaps your children’s graduation or wedding in decades to come?

Why not take a look at your finances and think carefully about how to divide your money? Research your options, arrange your international money transfer and create a fun present and a fabulous future.

This is a Guest Post from Les

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Chris Parsons June 2, 2011 - 8:50 am

Saving vs Spending is not an “either or” proposition in the sense that you can’t do both – but it is in that with a limited income, you must decide how much to save vs how much to spend.

It cost money to live (for most of us), therefore it is impossible to just save without spending.

It is possible to spend without saving, which is what many people do. Personal Finance is about increasing savings, which requires lower spending (or higher income and a smaller increase in spending).

retirebyforty June 2, 2011 - 10:27 am

If you make enough money, then you can save and spend. We make OK money and keep a lid on spending so I think we have a good balance. Unfortunately, many people live paycheck to paycheck and they don’t know how to improve their situation.

krantcents June 2, 2011 - 12:25 pm

I place savings as a priority, however I still enjoy life. My wife and I take vacations, overseas and domestic trips, and spend money. I make choices which are reasonable that way I can achieve a good future and enjoy the journey.

Squirrelers June 2, 2011 - 3:38 pm

Savings is the priority, period. That said, once savings needs are taken care of, you might as well live a little!

Now, that doesn’t preclude saving as much as possible and delaying gratification. After all, many great experiences are free or inexpensive. But once needs are taken care of, a little money being spent shouldn’t create excess guilt.

Henway June 2, 2011 - 7:21 pm

I think one of the best ways to balance the 2 is to have a “fun fund”. Put money into it, and only use the fund for fun, not for necessities or paying the bills

Bob June 6, 2011 - 10:22 am

Of course saving is the top priority, but we’re all a lot more productive when we take time to enjoy life and cut loose every so often. I make a point to, like Henway, set aside a “fun fund.” Every month, I have a set amount that I will use for things like dining out, drinks, entertainment, etc. If I have a vacation coming up, I increase the amount I put into my fun fund and live below my means for a few weeks. I don’t think I would even make it to retirement if I couldn’t enjoy my money a little bit along the way.

V February 16, 2012 - 8:39 am

I think the key is to be flexible – there are times when you will be able to assign more to savings and other occasions when bills or outgoing expenses will need to be covered. So long as you can review your savings at a regular time to ensure you are on track for putting away what you think you need, then you can have some peace of mind or at least work out what additional savings you need to put in place.


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