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How to Balance Saving Money vs Spending Money

If you’re on social media, you may have noticed a couple of trends over the last year or so. One of these trends is this: “I’ll never be 22 again in the south of France, but I can get the money back, right?” The idea is that you should spend on experiences now, without a care because you can always earn more money. But you’ll never be this age again. I think these trends have a little bit of merit, but in general are kind of nonsense. The real question is: how to balance saving money vs spending money? Yes, you’ll never be this age again, but you also don’t want to broke in old age either.

How to balance saving money vs spending money

You can have fun past the age of 25. Financially secure YOLO (You Only Live Once) is the lifestyle philosophy that I live by. It allows me to enjoy my present day while also planning for a badass future. So what is financially secure YOLO?

After growing up low income and struggling to pay off my student loans, I found myself struggling with wanting to balance my deep desire for financial security with my deep desire to want to enjoy my present life. Thus, I came up with this philosophy called financially secure YOLO.

How I balance saving money vs spending money: Financially secure YOLO

Financially secure YOLO is an approach to your financial planning and living that takes your life one year at a time. In the first half of the year, you front-load your financial goals. Then, in the second half of the year, you let it ride with your spending and your lifestyle goals.

So as an example, for me, that has meant for the last eight years of my life, I have taken between January and April to max out my IRA every single year. I also try to take between January and June to save for travel that I will do later on in the year. By front loading these goals between January and June, I’m not taking very many trips. I’m not going out to eat a lot. I’m living a low-key, very low spend lifestyle in the early part of the year. That way, I can hit that IRA by April. And, I can have all the money that I need by June that I will then spend in July, August, September, etc.

In the second part of the year, I am spending all of that money. I’m buying gifts. I’m taking trips. I am going out to eat. I am hosting events, things like that. This means every year, right off the bat, I am taking care of my future self. I am gifting my future self that financial stability that I so deeply crave. And then later in the year, I do my YOLOing.

This method prevents second-guessing on saving money vs spending money.

Since I’ve already hit my main financial goals for the year, there’s no second-guessing myself. There’s no: “Oh, can I afford this? Oh, should I really be doing this?” I don’t feel guilty about my spending in the second. Then, in the second part of the year, I am spending all of that money. Right? I’m buying gifts, I’m taking trips, I am going out to eat, I am hosting events, things like that.

How to know when to spend vs when to save money

Why this approach works

Now, this particular approach to money and to life planning really works for me for a couple of reasons. One, the earlier part of the year tends to be my busier season of work. I’m a financial educator, when people are talking about money, when people are thinking about money, it’s January and February. New Year’s resolutions are when everyone wants to talk about money. In the summer, that’s when people are on boats, they want to be drinking on patios and I respect that.

Work around your life’s schedule

For me, I get a lot of work in January, February, March. Then June, July, August, I don’t get a lot of work. Also, I’m an indoor person when it comes to the winter. I don’t ski or snowboard. I enjoy the cold weather, but I’m not really an outdoorsy winter person. Instead, I am an outdoorsy summer person. I am a hiker and a camper. In the winter, it’s really easy for me to not spend very much money. This is because I’m mostly at home, re-watching season 1 of Fargo. During this time, I’m playing board games with my friends and I’m doing a lot of low-cost activities. This allows me to funnel my money into my savings and investments.

Then, when the warm weather rolls around, I’m outside. Maybe I’m climbing mountains, I’m camping, I am swimming in rivers, I’m swimming in lakes. That is my outdoor time, and that’s when I’m spending money. Now, if you’re hearing this and you say, “Okay, glad that works for you, but I don’t have the same kind of lifestyle,” that’s totally okay. You can still apply this philosophy to your money.

Maybe for you, the reverse is true. The first 6 months of the year, you’re spending a lot of money, and then the second 6 months of the year, you’re saving a lot of money. Maybe the first 3 months, you have a lot of birthdays or anniversaries. Maybe you spend a lot in the first three months, and then the remaining nine months, you live a more austere lifestyle.

You don’t have to focus on both goals at once.

The general idea here is that there are chunks of time that you are not spending a lot of money. During this time, you’re focusing on your long-term financial goals. Then there are chunks of time where you’re not really focusing on your long-term goals, and you’re focused more on the present. However that shakes out in your life is totally okay. I find this approach to be really helpful because it allows you to hit the now and also hit the later.

The dollars that I invested when I was 28 are now working for me at 35, and the dollars I invest at 35 will work for me when I’m 55. Financially secure YOLO allows me to ensure that every single year, I have a period of time where I am focusing on those long-term goals. That’s financially secure YOLO.

I want to take a second here and talk, talk about why I think regular YOLO, as popularized by Drake, kind of sucks. First of all, the idea that life ends at 25 is really dark and also inaccurate. Often, a lot of things that people talk about, especially on social media, as things that you can only do in your 20s are things that you can do for the rest of your life if they are deeply held values.

You can still travel when you’re older

Travel comes up a lot. “I have to go to Italy when I’m 25! I have to visit Thailand before I’m 28! These ideas that there are certain types of trips that you can only take at certain times in your life are really deeply embedded in a lot of the social media conversations. It’s simply not true. Italy’s not going anywhere. You can go to Italy at 50. You can get a group of your girlfriends together to visit Italy when you’re 75. If travel is the value, if time with friends is the value, you can do those things past the age of 25.

This idea feeds into a false dichotomy that we are only valuable while we are young. This is a really harmful narrative, especially for women. Women are often told that aging is a prison from which there is no escape. That every year we get further away from 20, we are less beautiful, we are less desirable, we are less valuable. That’s an awful way to approach aging ’cause aging’s inescapable, babes.

And this same approach is not given to men. Men are celebrated for aging. We talk about things like salt and pepper hair being sexy. We talk about being a silver fox or a zaddy, and we celebrate men aging. But, I think we should start celebrating women for aging.

Should I spend money on travel or should I save it?

Pop Culture YOLO is damaging for our finances

So basically, I think that the pop culture definition of YOLO is incredibly damaging for our financial mindset, as well as our social mindset. I think that we should approach spending as things that fulfill you. These should be things that lift you up, and that bring you closer to the person that you want to be. Spending, for example, going to a yoga class just so you can take a picture and put it on social media is not how we should approach spending.

There is a huge difference between spending on a truly once-in-a-lifetime meal at an exclusive and expensive restaurant versus spending a ton of money all the time just to be able to document your life for other people online.

Coming back to that TikTok trend that I talked about earlier: “I will always be able to earn more money, but I’ll never be 22 in Sicily ever again.” This idea I find really financially harmful. It encourages people to go into debt for specific experiences and then you’re stuck with the debt for the rest of your life. Or, if you spend your 20s racking up debt so that you can go experience these once-in-a-lifetime things, you’ll never be able to do again. This is a lie; so then again you have to spend your 30s paying off this debt. That’s no fun. Now you’re 30s, you’re entering your 30s with this huge weight around your neck that doesn’t need to be there.

A Plan to Balance Saving Money vs Spending Money

Step 1: Get out a calendar & identify important dates

So if you want to implement financially secure YOLO in your life, here’s what I want you to do. First, get a calendar and highlight the times of year that you have a lot going on in your life. This includes things like birthdays, trips, anniversaries, times when you’re going to be spending a lot of money. Then, I want you in a different color to highlight the opposite times of year where you have more downtime.

Step 2: Learn where your money is going

Next, I want you to pull out your credit card spending, your debit card spending, and any cash spending. And if you don’t already have this information, you can grab our values-based budget workbook. It has a 30-day spending tracker, a budget spreadsheet and an 8 chapter workbook. The workbook walks you through identifying your spending habits and it’ll give you all this information.

Step 3: Put together a timeline for saving money vs spending money

With that information, you can then put together your financially secure YOLO timeline. How much can you save during your downtimes? What is your income and how much can you save? What are the financial goals you’re working towards in those downtimes? Are you saving for retirement or a trip? Are you trying to build money for your mom and dad’s retirement? Get really specific about what you want to use your downtime savings for.

As an example, again, I always prioritize my IRA. I am really concerned about my retirement income. So, I want to make sure that I am putting money away when I’m 35 for 65-year-old me. After I hit my investment goals for the year, I turn my money to short-term savings goals. You can follow that or you can switch it around if you have other financial goals. Live your best life.

So that’s financially secure YOLO. Would you try this? Do you do a version of this? Are you interested in this? Let me know in the comments! And if you’re more of a visual learner, check out this information in the video below.

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