This past Saturday, I was a dinner guest at the home of a family friend of my wife’s parents. Over dinner, the conversation was lively and, as is often the case with my wife’s family, refreshingly frank.
One major topic of discussion was one individual’s (a person we’ll call Reggie) balance of several different aspects of his life as he approached retirement age. Reggie lives in a small apartment and has a very well-paying job, but he also has a taste for expensive vacations, taking two or three a year. He describes himself as “tolerant” of his job – he doesn’t necessarily want to do it for the rest of his life, but it’s not something he entirely loathes, either.
Reggie reflected that many people he knew had encouraged him to cut back on his travels and other personal expenses and instead start socking that money away for retirement. He argued that he didn’t have any interest in doing that, because if he were to do that, he would be foregoing trips that he could take now while he could still enjoy them in good health in exchange for a later period in his life where his health might not be as good.
And I wholeheartedly agreed with him.
There is no ready-made solution that balances saving and spending that works for everyone. Some people feel most natural when they’re very frugal, while others find a better balance with more spending in their life.
When I compare my own life to Reggie, I’m pretty sure that our spending is vastly different. He seems to splurge more on consumable items than I do (such as trips, food, experiences, and so on), for example, and I’d be willing to bet that in a given year I retain more of my income than Reggie does.
But we’re both in a reasonably solid financial state – and we’re both happy with where we’re at.
The key thing that everyone shares is a need to keep that spending lower than what you earn over the long haul. If you spend more than you earn, you’ll eventually have to pay the piper – and quite often, that process will be very painful. If you spend less than you earn over an extended period of time, you avoid that painful experience.
It’s a balancing act, to be sure. If we simply give in to every whimsical desire we have, virtually no one would spend less than they earn. On the other hand, if we were all highly austere, we would simultaneously deprive ourselves of many valuable life experiences.
My personal belief is that modern society tends to unbalance people somewhat on the side of more spending. The cultural cues that we all get tend to push us towards spending more, whether that spending is justified or not. Over a long period, particularly when that spending isn’t matched with appropriate income, we can get greatly out of balance.
What I’ve found is that the one sure sign that your balance is out of whack is that you’re unhappy with your life. If you’re afraid to open up your bills, there’s a balance problem. If you spend all of your time living as frugally as possible but feel empty at the end of the day, there’s a balance problem here, too.
The way to correct that balance problem is to start adjusting things – slowly but surely. If you’re unhappy with the amount you’re spending, find ways to cut back and take it a step at a time. Similarly, if your life feels as though something’s missing, don’t be afraid to dip your toes in the pool on occasion.
Life is all about balance. Don’t be afraid to actively see that balance that works best for you, even if it’s not the balance that others might have.