Have you ever been in a situation where you’re confused about whether to buy a gadget or take a vacation? Or to save and invest? It’s a tough call, especially because what you decide to do affects your finances.
In this blog, we will discuss whether you should save and invest or spend it because you only live once.
Estimated read time: 3 minutes and 42 seconds
Hint: It’s not as easy as a coin toss.
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Buckle up, here we go!
Why should you save?
Savings is important because living paycheck to paycheck isn’t viable in the long term. Did you know that 30% of millennials and Gen Z don’t feel financially secure? And are not confident whether they will retire with financial comfort.
In fact, many senior citizens are low on retirement savings. They underestimated their life expectancy and saved less. To avoid these situations, you need to take charge of your financials. Be aware of your financial situation and start investing as early as possible.
Why should you spend?
Why are we talking about spending money? Isn’t it a bad thing? Well, it depends on whether you are spending on things that are valuable to you or not.
We have observed people often join the savings phase seriously and forget to live life. They stop spending altogether except on essentials. Extremism is always wrong.
You should always be able to spend on things that give you profound happiness and help you in your journey towards your goals.
So what is the answer?
The answer is to balance – easier said than done. We know how hard it is to maintain a balance, especially in an Indian family. Just when you think you have figured out your finances, your parents or siblings ask for extra money. Tossing out all your plans.
Most Indian families don’t discuss and plan expenses. They drop them like a bomb on your financials. And as earning members, you feel the urge to fulfil their wishes.
Let’s try to understand this balancing concept with our everyday work life. And check whether we can try to add it to our personal finance journey.
When you work for 9 hours daily, do you work for 9 hours continuously? No, right? In a perfect world, even your boss wouldn’t want you to do that. Because you won’t be productive enough and will get burned out in the long run. That isn’t good for you or your boss.
So what do you do? You take minor breaks between your work sessions to rest and energise yourself. This way, your productivity will be higher. You will be able to work for a longer period with less need for a big break.
This basic idea applies to all departments of our life. Coming back to our question of whether to save or spend. You need to carry out the same solution over here.
Everyone has some goals like owning a car, house or gaming station. Based on your income, categorise them as short, mid or long-term goals.
When you keep spending your money for instant pleasure. Like buying an over-hyped, expensive gadget that doesn’t add much value to you. You won’t be able to achieve your goals anytime soon. But yeah, you shouldn’t deny yourself some kind of gratification here and there. Or else it will be hard to keep yourself motivated to achieve your goals.
It’s okay to have a small piece of ice cream or pizza while completely following the rest of your diet, right? We don’t want you to be at low willpower and end up buying something that doesn’t add to your goal.
No one wants to be in that situation and go through a paid guilt trip.
How to apply balance:
To know how much you can spend and save every month, you need to be more aware of your income, expenses and goals.
You can begin tracking them with a simple pen and paper or some tracking app. After tracking, you need to plan a budget.
There are a few budgeting methods like 50/30/20 budget, zero-based budget and envelope budget that can help you start. Remember, each one has its own merits and demerits. You shouldn’t follow them blindly. Instead, apply them as applicable based on your needs.
Still Curious?
If you are like us, who likes to analyse a little more or check out content in different formats, well you are in luck. Below you can find some suitable content we found.
Big Think – Personal finance: How to save, spend, and think rationally about money
The Money Guy Show – How Do I Balance Enjoying Money Now AND Investing For the Future?
Akshat Shrivastava – How to Earn, spend and invest money!
Note: We don’t have any affiliation with them. We are sharing links only for educational purposes. The opinions expressed by them belong solely to them and do not reflect the views of Vrid.