Today's guest post comes all the way from Boca Raton! Amanda Shaffer, from the Hightower Advisors, gives us some great tips on how to balance saving money and living life to the fullest.
It’s important to save money. You never know when you’ll have an unexpected large expense, like health care or car repairs. And then there’s retirement. It’s never too early to begin saving for retirement.
At the same time, it’s still important to spend some, too. You don’t want to save so much that you’re not enjoying your life. The trick is to find a balance between the two. Your Boca Raton financial planners can help you determine how much you need to save and what you can safely spend.
Have an Emergency Fund
Calculate how much your monthly expenses are. Make a goal of having at least six months’ worth of expenses saved up in an account. Then set up an automatic transfer every month for as much as you can afford into that account. If your job doesn’t have a lot of security to it, you may want to increase the total to nine months’ of expenses. Once you have this amount saved, you can taper down the amount that you’re saving.
Save for Retirement
If your employer has retirement savings as a benefit, take advantage of it. If your company matches your contributions, make sure to contribute the maximum. If your company doesn’t offer retirement savings, you can set up your own Roth IRA and save as much as you can into it, even if it’s only $50 per month.
With retirement savings and an emergency fund set up, the next step is to set goals for yourself. These goals don’t need to be only financial. It’s also important to set lifestyle goals for yourself as well. What hobbies do you want to pursue? Are there places you want to travel to? How much will these pastimes cost?
Some other questions to ask yourself pertain to other financial goals you may have. Are you wanting to buy a house? Have children? Move to another city? How much will you need to have saved for these goals?
Set Aside Money for Fun
It’s essential to have some money each month earmarked for spontaneous fun. For example, going out with friends, seeing a new movie, or shopping. Decide ahead of time how much you want to spend on fun each month and then stick to that budget. That way, you can still meet all of your financial goals, save for other hobbies and enjoyment, and not miss out on fun things that come up.
Reassess as Needed
It’s important to remember that no financial plan is set in stone. Just because your plan works for you now doesn’t mean that it will always. Your first try at a financial plan may not be the right fit even if nothing else in your life has changed.
Review and reassess your financial plan regularly, even if you think it’s been working for you. You may find that adjustments need to be made. It’s also important to consult with your financial advisor. He or she will have a better idea of how much you should be saving and can help you realize your financial goals. Boca Raton financial advisors can help you find the right balance between frugality and enjoying life.