The Savings to Spending Shift
Don’t let your money outlast your life.
The only reason to save money is to spend it on something that matters.
— Unknown
For some it doesn’t happen until they’ve officially retired.
Others do it too early and go into crippling debt.
But when is the right time to save less and spend more?
Ever since I got my first paycheck, I’ve managed my money on my own but last year I decided to see a financial consultant. I wanted to get a professional’s eyes on my plan.
I needed to know the answer to the following question:
Am I on track with saving up for retirement?
His answer:
You’re doing better than a lot of my other clients, even the ones 20 years older than you.
That lifted a weight off my shoulders.
I felt validation that I’ve been doing the “right things” when it comes to money. Like ice thawing on the first warm day of spring, I sensed a shift within me from penny-pinching to being a bit more free with my money.
I’m no where close to starring on an episode of TLC’s Extreme Cheapskates but I have exhibited a few miserly habits. For instance, I would add an extra 10 minutes on an hour long commute home from the office just to avoid a $2 toll.
I haven’t fully shifted into 6th gear on spending, but I am allowing myself the freedom to make purchases I normally wouldn’t.
Here’s why it made sense for me.
Setting myself up for success
One of my favorite types of YouTube videos to watch are on personal finance. Minority Mindset, George Kamel, Humphrey Yang, and The Money Guy Show to name a few. Whenever I watch them, I consider myself fortunate that I tend to tick the boxes on the suggestions they provide and, perhaps more importantly, have avoided the pitfalls.
I pay myself first by automatically putting money into savings and investment accounts every time I get paid.
When I get a raise, I put the additional money away to avoid lifestyle creep.
I have a budget and adjust it as necessary, aka what YNAB calls “rolling with the punches”.
I pay off my credit cards every month and don’t take on any new liabilities.
Because I’ve built up these habits over most of my life, I find myself in a blessed situation of not stressing about money.
It would be pretty easy to coast on these habits for another 20 years. But at some point I would just be amassing more and more money.
And to what end?
A coffin full of toys
No one gets out of this alive. And we can’t take our money with us when we go.
The one who dies with the most toys is, nonetheless, still dead. - Unknown
Bill Perkins is the author of Die With Zero. It is a book built on the fact that we are all going to die and the idea that net fulfillment is more important than net worth.
This book changed how I viewed my own financial situation. I highly recommend it for all of you die hard savers. It may change your perspective as well.
If all goes according to plan, you will reach a point in your life where you have socked away enough to meet your wants and needs for the foreseeable remainder of your life.
To truly accept this is to make peace with your own mortality.
We all have at least the potential to make more money in the future, we can never go back and recapture time that is now gone. So it makes no sense to let opportunities pass us by for fear of squandering our money. Squandering our lives should be a much greater worry.
— Bill Perkins, Die With Zero
After the appointment
My wife and I left the meeting with our financial consultant with a pep in our step. We decided to do something we hadn’t done in quite some time.
We went out for a Happy Hour.
It wasn’t a grand gesture of spending money. Rather it was more symbolic. We’re firm believers in spending money on memories rather than things (all though things are nice too).
A few months later I would buy a new set of golf clubs. (OK, so it’s not all about experiences but I could make new ones on the golf course, right?)
I also pulled the trigger on purchasing airfare to go back to the Philippines with my family. We haven’t been there since 2017. At first, I kept putting it off due to the pandemic but then it was the ever increasing cost of plane tickets that delayed our vacation.
The shift was that I put into practice the Die With Zero mindset.
Life is meant to be lived while we have it.
Take a moment to evaluate your financial situation. Decide if you’d be better served with a shift from saving to spending.
If you’re already making the transition, let me know about the experiences or things you’ve finally allowed yourself to purchase.
It is a great topic you raise, think about it alot!
Most people tend to be in 1 of 2 camps:
1. No saving at all - spend when you receive
2. Hoard, hoard hoard,
I'm definelty in 2, but trying to work my way to the middle ground. The funny thing is that it has to be taught emotionally. It hurts to pay too much. Or for something that has a price that you previously thought was way to much, but now actually brings you more value