Live within your means, yes. Save for the future, yes. But never forget how to enjoy spending some of your money on the things you love.

Spending now may be just as important to lifelong happiness as saving for later. The key is balance.

Most readers who email me ask for advice on how to save more and spend less. So, I was intrigued when a reader reached out with the exact opposite problem.

The reader—I’ll call him Cal—is an over-saver

For Cal, living frugally and saving money is so second-nature that it’s actually difficult for him to spend money, even though he has plenty.

As you might imagine, oversaving won’t make you happy.

So not only is it OK to spend money on things that will make you happy now and then, it’s the right thing to do! I believe a big difference between people who are self-assured about their spending and those who aren’t (because they’re either spending too much or not enough), is that the self-assured spenders are spending with intention.

I explain what I mean below, but first, here’s Cal’s story:

“I’m blessed to have two parents who have been pretty cheap throughout their lives. My mom worked at home only because my father is an MD. During my years growing up, I never saw them become flashy with their wealth. Heck, my father drove a 1984 Ford Bronco until 2003.

Due to my father’s hard work and saving habits (must run in my family, as his father is the same way), I was able to attend a private Catholic school without taking out loans (though I did get awarded a scholarship that offset a full year of tuition and expenses).

After I graduated, the job I took and am still in is a bit under my abilities as a CPA and definitely under my potential pay grade. Part of the reason I stay here is because of the comfort and ease of life it allows me, but second, because I emerged from college with no debt, I figured I could make up the salary differential by saving and investing more than my peers could with their college loans to pay off.

I currently max out my 401(k) and my Roth IRA.

Although my take-home salary is pretty decent, I’m living  below my means, both in terms of quality of household and not splurging or vacationing. Most of the time, after expenses, I still take my remaining funds and invest those too.

Right now, at 30, I have over $225,000 in invested funds, with over half in my 401k ($138k), another $58,000 in the Roth, and the rest in non-retirement funds.

The problem I have is allowing myself to ease up on my savings.

I would like to own a house soon and I’m getting close to needing a new or used car…but I know if I lower my savings percentage, I’m not going to max out my 401k contributions, which I consider to be a “missed opportunity”.

Aside from those future expenses, I often worry about having enough “emergency funds” since my non-retirement funds would essentially buy a new/used vehicle outright or be a significant chunk of a down payment on a house.”

I’ve known others like Cal, many of whom mastered being frugal during a period of life when they really needed to be. Years later, as they become debt-free and now earn a decent living, they still can’t bring themselves to start buying the things they want.

In my experience, this feeling is natural to some extent. As you move from being in debt to saving money, you don’t want to go backwards. Seeing your balances grow becomes a bit addictive.

In Cal’s case, however, he’s already invested enough that he could have over $3 million by age 65 even without contributing another penny (assuming an 8% average annual return).

Maybe that’s enough for Cal’s dream retirement or maybe not, but the point is, he’s got his long-term saving covered…and then some. Maybe he needs to shift some of his investing to short-term savings so he can spend money and still have cash for emergencies.

Whatever Cal’s decision, it reminds me of this simple point:

The key to financial balance is to both SAVE and SPEND with intention.

Intentional saving

You probably have plenty of reasons for wanting to save money. These might include:

  • A rainy day fund for emergencies.
  • A new home (or improvements to your existing one).
  • Travel.
  • Retirement.

Most likely, at any point in your life, you’ll be saving for more than one of these goals at once. If you’re not careful, it’s easy to let all the things you need to save for overwhelm you. As a result, you may become obsessed with saving more and more because, simply put, there’s always something to save for!

If, however, you become more intentional about your saving, you’ll take each goal and determine:

  • How much money you will need.
  • When you will need the money.
  • How you will invest the money.

Once you have done this, you can determine how much you need to save. If, however, you discover that you’ll need to save more than you’re able at the moment, that’s OK. Maybe it’s simply time to revisit your savings goals:

  • Can you reduce the amount you need?
  • Can you push off the goal?
  • Can you earn a better return on your money?

When you save with intention, you’ll have a better chance of getting the things you want out of life, but you must also realize that along with intentional saving comes to consciously spending.

It’s my simple rule of financial planning:

Save money for later, but spend some today. Odds are good you’ll live to 90, but you really could be hit by a bus tomorrow!

Intentional spending

What makes you happy?

  • International adventures?
  • Good food, good drinks, and good friends?
  • The latest technologies?
  • That new car smell?

Note: If your sole answer is making lots of money and seeing it pile up in your bank account just because, you could have a money disorder. This is financial hoarding. (Seriously.)

And if you can’t immediately answer that question, then let’s rephrase it. Think back over the last five years. What purchases brought you the most happiness?

For me, it’s been trips and experiences with my family and friends…friends’ weddings in Sarajevo and Puerto Rico, a bachelor party in South Beach, our own wedding and honeymoon.

My car, my iPhone, my camera…these things are nice, too. But over time, I think the money spent on trips and experiences have created more happiness for me.

Still, I know that going forward, I may spend money on new clothes, a newer phone, a bigger TV, etc. And if I’m not careful, soon I’ll be putting off planning my next vacation or passing on joining friends for a long weekend in Vegas because I spent too much on other crap.

Intentional spending is when you determine what makes you the happiest and then plan your finances so that you can afford as much of it as possible.

Here are some examples:

  • Dan lives with his parents and barely spends a dime except for $400 a week on two flying lessons in pursuit of his dream to be a pilot.
  • Emma earns decent money but drives a 15-year old Honda Civic and rarely buys new clothes but she takes three or four weeks off every year to travel abroad, places like Argentina, Thailand, and Australia. The trips each cost over $10,000.
  • Mike is a car guy. He’s chosen to live in a much smaller house than he could afford so he can always have the latest ride. Nothing makes him happier than rolling up to a party and turning heads.

Dan, Emma, and Mike all enjoy things that cost money—big money, in fact. So if they’re not intentional about their saving first, they could obviously become financial train wrecks.  (Of course, this happens to a lot of people who develop tastes for expensive things).

As long as they save intentionally first, however, they know what they have left to spend today. Then, it’s simply a matter of determining how you’ll spend on this, and how much on that. The goal is to plan your finances so you can spend more on what you value and less on what you don’t.

Back to ‘over-saving’

If you, like Cal, find yourself having obtained plenty of financial security but are unable to spend money, my advice is to revisit your intentions. What are you saving for? How much will you need? And what will it take to get there?

Next, what would make you happy today? How can you use some of the money you’ve earned to achieve that?

Financial planning is about balancing your needs and wants today with your needs and wants tomorrow.

We commonly hear about people who neglect the “tomorrow” part, but if we’re not careful, it’s possible to neglect the “today” part, too. Both matter.

About the author

Total Articles: 353
David Weliver is the founder of Money Under 30. He's a cited authority on personal finance and the unique money issues he faced during his first two decades as an adult. He lives in Maine with his wife and two children.

Article comments

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Max briggs says:

This is an interesting article. I fear I may be in this situation myself. I have been maxing out 401k’s and Roth’s for years and recently made the realization that the size of my nest egg is not going to be my highest issue. A bigger issue will be having money available to retire early if that’s what I want to do. I have started to save additional funds in non-retirement vehicles, and now I think I’m in pretty good shape no matter what I want to do. But I’ve been saving so much for so long it’s become habit. Reducing my savings rate causes me real anxiety. It’s gonna take some serious work on my end just to convince myself that it’s okay.

Mara Miller says:

I have a 27-year-old who is following the 50-30-20 rule (basically: 50% needs, 30% wants, and 20% savings). But I was curious what the recommendations are for using the 20% of savings–it’s generally written as life goals. Based on my google search, when it is okay to spend your savings is not frequently discussed and there is less advice. Obviously, you have an emergency fund to spend in emergencies (how much that should be varies a lot) and retirement funds to spend in retirement. I heard once on NPR, someone talking about saving for transitions. I liked that. Retirement is a transition, but one of potentially many. Others include changing jobs, moving, buying a house, getting married or divorced, having children, education, long-term illness etc. Is there anything written about ways and when to think about spending your savings? And besides retirement, what different transitions/life goals cost and how to save for them? Also I’m curious, if you are following the 50-30-20 guidelines, are trips and technology (i.e new phone or computer) something that should come from the 30% (wants) or 20% (savings)?

Brandon says:

Still, one of my favorite articles on money on the internet! After 8 years, I still come back to this post every few months for inspiration and motivation! So Good!!

Steve says:

What if you’ve got more or less everything you want, plenty of savings, but money left over?

Should you spend money on every activity/item/whatever that might bring you happiness, however marginal? Or should you put it in a savings/investment account for the future – where you might need the money, or you might have a better opportunity to turn it into major happiness?

My spouse and I save half of our income. We have $~750k now, which at 8% would grow to 8 million by the time we retire. But we have a new car, a baby, a comfortable (if not huge) home, take multiple vacations per year, eat out every week… There are more things we could spend money on, I guess, but overall we’re happy with what we’ve got.

Meg says:

Then why don’t you use it to help others, Steve? If you are putting money aside for your child’s college, maxing your retirement (consider you can retire early if you have more) and you are comfortable with your status then you can use your excess to help support food kitchens, family shelters, work with Habitat for Humanity, help pay for drug costs for cancer patients and tons of other types of social good that benefit from donations.

I would also say that you should have 12 months in cash/CDs for your emergency fund, $10kish+ for your next new car, a paid off mortgage, and other things like that to be really utilizing your money for yourselves.

amanda says:

How can he have $58,000 in a ROTH? I thought you were allowed a maximum of $5000 a year put into the account…

Meg says:

Amanda, if he put in the max every year since he started working ($46k) and his investment is doing well, it’s not unexpected that he could reach that. I do have to say that I wish mine was doing as well!

Max briggs says:

If he’s 30 and been maxing out between 5k and 6.5k per year since graduating at 22 he’d have between 40 and 45 k in contributions alone. Over 8 years having another 10-15k in earnings is definitely possible.

The only way to achieve financial independence is by saving. The question is – how hard do you want it?

There is always temptation between seeing the world, drive a nice car and experience stuff vs. saving. Depends what do you want and when you want it.

Looking at analysis of our financial situation over last three years. After running our family budged we decided to live on one salary only. Both of us are at work, but there is no point to work just to stay alive and keep expenses going.

David says:

Thanks for this article. I feel like I’m somewhat of an anomaly. I was fortunate to grow up with extremely financially successful parents who would buy me whatever I wanted. But I never wanted much. Now that I’m on my own I work a crappy job with low pay, and all that happens to my money is my wife spends it all. I never spend on myself. But, the article made me realize that part of my burnout is from never spending a dollar on myself.

Squirrelers says:

We all have to live a little. I preach the ‘save and invest’ mantra myself, but I also think that we shouldn’t always deny ourselves all enjoyment. We can be frugal yet responsible spenders. Those who just can’t bring themselves to spend, and intensely hoard, need to ask themselves: do you enjoy being around people that can’t bring themselves to spend a nickel?

Having said that, it does seem like Cal has been fortunate with the breaks he got to start his adult life.

The Oil Barron In Training says:

I’m 24 and I consider myself a smart saver/spender. I was blessed to have parents that were great role models. Like they always told me, life is about moderation. Whether it is saving, spending, drinking, working, etc. I came out of school debt free and landed a great job and am able to live on 50% of what I bring home. I live my life to the fullest, but am also a saver. To me it’s about being smart with your money.

I live in a luxury condo. I own a 2008 BMW 328i and a 2003 Dodge Viper. I go out with my friends almost every night. Don’t get me wrong, I don’t have a trust fund or an insane job. I have just found ways to get what I want in a smart way. I have all of this for half of what I bring home. How? ….

Being a total gear head, I started saving for the viper when I was 10. I had a car fund in college that had one more digit than my checking account, but I never touched it. I also bought both of the cars used. I bought the Viper for $39k with 14k miles on it, that’s less than people pay for a new pick up truck. I bought the cheapest certified pre-owned BMW I could find for $20,000 cash with 44k miles on warrantied out to 100k miles.

I have a roomate that I live with that allows me to spend half of what my friends spend on their places and mine is bigger, nicer, and better located.

When I go out, I have people over at my place to have drinks before we go out to the bars. That way I only end up buying a few at the bar. My average tab is $16.

The point of this diatribe is not to gloat or brag. It’s to show that you can live an awesome life style, and save alot as well. I am always buying things in a smart fashion. I Don’t waste my money on crap. I set short term savings goals with a dedicated purchase at the end. I basically budget fun into my life. I only buy used or on sale. I shop around for the best deals. Live life smart. As I always tell myself each morning: “You only get one shot at today, so what are you going to do with it?”

Sam says:

The Oil Barron:

I like your story. Shows that you can have a balance. You didn’t mention retirement 401K or Roth IRA. Does most of your savings go towards cars and other purchases or do you save for retirement too?


The Oil Barron In Training says:


Good question. The cars, condo, and life style are all sustained on half of what I bring home. I max out my 401(k) each month with a 110% employer match on 6 percent. I get a pension when I retire of 90% of my last two years average salary at the time I retire until the day I die. All of that is taken out of my salary and is not part of what I refer to as my “take home pay”. I still only live on half of what I bring home. The other half goes into an IRA or in the savings account.

I put $20k down on the Viper and still owe about $15k. I am going to pay that down in the next 3 months and be totally debt free. The monthly payment I was making ( which was double the minimum) will then go into my “next car fund”. But I won’t be buying another car for a long, long time.

Mario says:

Moderation is definitely key. Knowing when and what spend money on is key. Same goes for saving money. A lot of what you have stated in this post are very good points, not for young people but for everyone. I can definitely appreciate the focus of your blog

Colin says:

Thanks for publishing this story David. I am the “Cal” referenced to in this story.

Unlike the over-saver Justin knows, I don’t eat rice & beans on a daily basis (though I usually always get the same $2.99 sub from the local sub shop rather than a more tasty, and costly, option) and I do run the A/C (though I hate seeing the electric bill).

I guess part of my situation is that I didn’t realize just how much I’d have at 65 (assuming an 8% return that David used as an example) with what I currently have (I sent this email to David a few months ago, so that balance is currently higher now)…part of that is laziness in doing the calculation myself. I guess another thing is that I feel I over-save now because I figure when I get into the world of home ownership and children, I won’t have the ability to save like I do now. Once I have kids, I will need to lower the amount I save to feed and clothe more mouths while also contributing to their education. Last is that I’m concerned about having enough to last me considering how long some people are living nowdays. As a safe bet, I think I need to save enough to live to 90 (though I have no desire to live this long) and if I die before then, then fortunately I will leave enough to my heirs.

I also liked what Sam says in that I can’t count on my income growing to six figures (though if I were to switch into a job that utilizes my CPA license more, I probably could) nor will I count on Social Security being around.

But then again, I do realize my life can end tomorrow. I have loosened up a bit (bought an iPad which I was able to do suprisingly without any buyer’s remorse) and I hope to be traveling to visit a friend in a few months. I do like the suggestion made by others regarding charity…I have been donating to my alma mater but may step up my contributions.

I think alot of my mindset (as echoed by Christina) is because of family…that we can inherit the traits/mindsets of our parents.

But again, I’m thankful for this article and I hope that maybe I can find a way to kick back and have more fun because I know I’m starting to get awfully close to the line of being cheap rather than frugal.

Justin says:

I only know one person who is an over-saver. 90% of the people I know either don’t save any money or waited too long (started in their 50s)

The over-saver that I know lives one of the saddest lives I’ve ever heard of. He eats rice and beans every day (cuz its cheap), doesnt run the a/c in the summer even though temperatures reach 100+ every day, and at night just goes to bed early instead of using electricity to keep the lights on.

So yeah- I definitely agree that these people have a problem just as bad as not saving anything at all.

Tommy says:

I just really appreciate your blog for the information and the honesty you provide. It’s entertaining, too, which doesn’t hurt. I’d say that Cal’s problem is a good one to have, and I wish him luck in deciding his next move.

Sam says:

I really enjoyed this article. I am 27 years old and I constantly think about will I have enough when I am older. I currently make 65K and save 20% a year for retirement. My parents are in the process of retiring and with the latest market hits in 2007 it has become more difficult for people to retire. Also – we have no idea the future of social security and medicare. There are a lot of question marks and we can expect people in their 20’s now live to 90. I do not want to count on my income growing to 6 figures because nothing is for certain. I always try to live below my means while my friends make 100K + and save maybe 5%. The number one rule for me is SAVE MORE. You can’t count on the market or a higher income but every penny you save will grow your nest egg.

Brent says:

MODERATION is key!! If you save too much and complain about the cost of everything then you’ll get no enjoyment out of life. If you carelessly spend too much then you’ll end up buried in debt. Remember you can’t take any money with you when you die, but you have to manage it successfully while you’re alive!

Joy says:

Being that I work in the non-profit sector, I am wondering if you might add “donating money” to the spending category? Perhaps someone like “Cal,” who has a hard time spending money, would like to spend money in a more rewarding way. Spending money doesn’t always have to be about obtaining goods or experiences; it could also mean helping out a community or organization in need that fits your values. Just a thought.

p.s. do you have a section on recommendations re: donating/charity?

MD Sam says:

I’d like to see this too. In particular, an analysis of donor advised funds – which are essentially investment accounts which will eventually be giving all the money to charities you choose. You don’t have to donate right away, but you do get the tax write-off for that year. I’ve been thinking of starting one, so I can give larger donations later in life.

Rochelle says:

Terrific advice for your years. I am a 62 year-old great-grandmother and sure wish I had known these ideas when I was your age. Keep up the good work. I am going to recommend your site to my 22 year-old granddaughter.

This article describes me to the T. I am a financial hoarder and it drives me crazy becasue saving is all i can think about. I do take a month vacation every year and I like to go out to eat but I will not spend money on clothing or a new car (I have a 1999 Toyota Camry with almost 207,000 miles on it).

Sheelah says:

Thanks for sharing your story, “Cal.” I learned a lot from it. To answer the question, I spend on traveling and my hobby of sewing/quilting without remorse. Both help me grow as a person and give me hours of joy. My “sacrifice” is to live in a cheaper/smaller apartment than I can afford, which helps me refrain from buying unnecessary stuff because there isn’t room for it (bonus: it lowers my carbon footprint as well!). I sew my own clothes and am a member of freecycle, so I get a lot of my household needs for free. None of these things are really sacrifices, though. They work for me!

Jackie says:

I’m all for saving and I can definitely save more but this Cal guy is out of control! What’s the point in living your life in constant fear and not actually enjoying any of it? My dad, who has made a great living for himself and has been very poor at times in his life, always said: “what’s the point in making any money if you can’t enjoy it with your friends and family?” I think he’s totally right. As long as you don’t have debt and have solid savings, enjoy yourself! Because you really could be hit by a bus tomorrow.

Christina N says:

I’m in my 20’s and it was really interesting reading what you had to say about all of this… I come from a very conservative home where the mentality is always “SAVE SAVE SAVE”. I guess I often have buyers remorse over everything simply because I’m not saving. It makes sense to keep a little in the bank, but I’m glad there is also a little reinforcement in spending a little now as well!