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To spend or save an individual choice

Some people are good at making money, at saving and investing. But they often struggle with spending money. Others are really good at spending money. But they wish they were better at making money … so they could have more to spend.
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Some people are good at making money, at saving and investing. But they often struggle with spending money.

Others are really good at spending money. But they wish they were better at making money … so they could have more to spend.

Achieving the perfect – well, at least a reasonable – balance between the two approaches is an enviable accomplishment. And it’s one we should all try to achieve.

In fact, you should monitor how you balance “spend and enjoy now” with “save and invest now to have more to spend and enjoy in future” at least once a year because your situation, and so that balance, could change frequently.

It’s a very personal matter.

Two seemingly identical individuals or families could have two totally different approaches.

Perhaps one has had a history of being associated with life-threatening illnesses, while another has a history of, for various reasons, never having had enough money for the basic necessities let alone the luxuries.

Clearly the first will lean more toward “spend and enjoy now” in case there is no future, while the second might be determined to focus on sacrificing the spending to build a reassuring security wealth blanket.

The annual review is important.

Save and invest could give way to increased spending and enjoyment if a job change or windfall produced more disposable income.

On the other hand, a likely underfunded future could spur more save and invest.

If you have a family, try to involve everybody in this annual review so all will understand and be more likely to support the relevant strategy.

Note that sometimes it’s hard to break loose from a lifetime habit of saving and investing, and to start spending.

To help make that switch, reassure yourself (a relative or friend) the money won’t be wasted, that spending will be for worthwhile enjoyment and satisfaction (and could include supporting individuals and worthwhile causes).

After all, the future is now: this “spend and enjoy” is the reason for all that saving and investing.

Mike Grenby is a columnist and independent personal financial advisor; he’ll answer questions in this column as space allows but cannot reply personally - email mike.grenby@gmail.com