Wealth Management

How to balance your spending and saving for a comfortable lifestyle

Chris Elliott
28 September 2023
5 min read

Spending and saving habits lie at the heart of your financial wellbeing. They guide you toward achieving short-term plans while securing your long-term dreams. But reaching this equilibrium is not easy especially when at their core, spending money and saving money are two competing concepts.

This article explores the challenges and benefits of mastering your money habits as well as some tips on how to find the right balance of spending and saving.

Challenges of balancing spending and saving habits

  • Psychological influences: Your emotions, personality traits, beliefs, and values play a part in how you choose to manage your money. The desire for instant gratification can clash with the need for long-term security, leading to inner conflicts that can challenge our financial wellbeing. This internal tug-of-war can lead us down a path of impulsive spending or extreme frugality.

  • External pressures: The world around us exerts its influence, too. Our income, ever-rising living expenses, and social conformity can catch us off-guard and disrupt even the healthiest of money habits.

Even if you’re an expert at financial planning, the goals we set for ourselves may change or get pushed back as psychological influences and external pressures make their mark. At times, your savings may take a hit and you have dip into your emergency fund and at other times, you could wake up and realise you’re not living the life you want and decide to shift the goal posts. Life is messy but learning how to balance your spending and saving can help alleviate some of the financial pressure and keep you on a more even footing.

Benefits of balancing spending and saving habits

  • Enjoy life now and in the future: Mastering your money habits gives you the ability to savour life's pleasures today, without the guilt or anxiety, while simultaneously protecting your future dreams.

  • Reduce stress and increase financial stability: Imagine a life free from the constant worry of financial instability. Finding the right balance between spending money and saving money can not only provide peace of mind, but a sense of fulfilment and contentment.

By leveraging wealth management strategies, you can accumulate wealth and create a fortress of financial protection around yourself and your loved ones. Whatever you set aside can be a springboard for seizing new opportunities, enabling you to achieve your goals and build towards a comfortable retirement.

Tips to help you balance your spending and saving

Spend less than you earn

  • Know what your expenses are: Create a realistic budget covering essential living expenses (housing, food, utilities) and discretionary spending (entertainment, travel, hobbies) to help you live within your means.

  • Build an emergency fund: A general rule of thumb is to have three to six months' worth of living expenses sitting in an emergency fund.

  • Use a budgeting app: Budgeting apps or tools can help you keep track of spending and help you identify areas where you can cut back.

  • Don’t spend for the sake of it: Any extra money you have at your disposal should either be saved, invested, or spent on things that bring you genuine joy. Remember, you’ve worked hard for that money so either put it to work or towards something you really want.

Automate your saving

  • Set up automatic transfers: This can be linked from your income account to your savings account during each pay cycle.

  • Shop around for the right savings account: Look for high-yield savings accounts with minimal fees.

  • Leverage goal-based saving: Goal-based savings accounts can help you visualise your progress and ensure your dreams don’t get sidelined as different life events occur.

  • Maximise your super: Making additional super contributions can potentially be a good way to boost your savings for retirement and ensure your money is working for you.

Be realistic and flexible

  • Set clear goals: Goal setting is a cornerstone of financial planning. Aligning your goals to your values and priorities will make committing to them easier.

  • Audit your expectations: Regularly review and adjust your spending and saving as circumstances change to help keep your expectations in check.

  • Plan for the unexpected: Protect yourself and your family against unforeseen circumstances by planning for different financial scenarios. Expert advice from personal insurance specialists may help you decide what action to take to maintain your financial wellbeing.

How Findex can help

At Findex, we specialise in offering personalised wealth management solutions to help you attain financial freedom.

Here's how:

  • Holistic solutions: Our Family Office model assigns you a dedicated point of contact who collaborates with multi-disciplinary experts within our organisation to help manage your finances. Whether seeking advice on wealth management, tax planning, or retirement strategies, you'll receive comprehensive solutions tailored to your unique circumstances.

  • Forward-facing methodology: By proactively addressing the challenges of tomorrow while resolving today's issues, we help you build a robust foundation that supports your long-term financial goals. Our commitment to innovation and research ensures you're on the cutting edge of financial strategies.

  • Geographical accessibility: With over 100 locations across Australia and New Zealand, our financial planning services can be accessed locally and conveniently. Our widespread network ensures that no matter where you are, you’re able to find an office near you.

Balancing your spending and saving means being able to enjoy life now without sacrificing your long-term financial wellbeing. For more information on how to improve your money habits, get in touch with a Findex financial adviser.

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Author: Chris Elliott | Managing Partner

Chris commenced with Findex in 2015 as a senior financial adviser and brings with him over 28 years’ experience in the financial services industry. Chris advises on wealth management, direct equities investments, superannuation strategies and estate planning.