You have probably heard a tragic story about someone who pinched pennies to save for retirement, only to have their life cut short before enjoying the fruits of their labor. As my grandma says, “Everything in moderation,” but how do you find the right balance between enjoying your today and investing for your tomorrow?

Build a Strong Foundation

Money does not buy happiness, but I believe that it can buy peace of mind. One way your money can do so is through an emergency fund. I still remember feeling the weight lifting off my shoulders as I made the final contribution to my emergency fund. Having that box checked gave me permission to live a little.

Another way to grant yourself permission is to have your finances figured out for the next five years. What I mean by this is to anticipate what goals and large, one-off expenses are next in line and actively include them in your money decisions. For example, are you considering starting a family? Is your car getting old? Do you plan to change jobs? By always knowing what’s around the corner, can you properly allocate budgetary surplus, future raises, and bonuses across your wants and needs.

Finally, take some of the load off your plate and automate your finances!  I’m a big fan of reverse budgeting, which is when you back into how much you need to save on a monthly or per paycheck basis to meet your goals. Once the target is met and bills are paid, the rest can be spent freely. So automate your reverse budget savings and enjoy guilt-free spending.

The Happy Medium

Consider these two extremes:  the penny pincher vs. the paycheck spender. While they both may be satisfied with their financial decisions, neither is without opportunity cost. It’s impossible to quantify the opportunity cost because death, although guaranteed, is often not easily timed. In the worst-case scenario, the paycheck spender outlives their ability to work, and the penny pincher dies without getting to spend.

To me, a well-lived life doesn’t delay happiness and doesn’t delay saving. So, how does one balance saving for the future while enjoying life along the way? I believe the perfect middle ground is to maximize the happiness per dollar.

You’re probably thinking, “But you just said money can’t buy happiness,” and that’s right. Having money in your bank account will not make you happy, but putting that money to good use can. So first, figure out what brings you joy. Is it cheering on your favorite soccer team? Is it exercising and pursuing fitness goals? Is it following your favorite band around on tour? Only you can decide. Once you know, focus your non-essential spending in that category and strip spending in areas that don’t fulfill you. 

Reality Check

Perhaps reading this made you second guess yourself. Maybe you’re a penny pincher or a paycheck spender. Do you need a reality check? Hire a financial planner. Financial planning is more than allocating a portfolio or verifying you’re adequately insured. It’s about holding people accountable to their goals and dreams and keeping them on track to living an enjoyable life—both now and in retirement.

Personal finance is personal. Everyone has different life experiences and attitudes toward money that can get in the way of financial success. It’s helpful to work with an objective third party who can crunch the numbers and recommend a path forward.


We are born, life happens, and then we die. We can’t take our money with us. With practically no control over when our time comes, it’s essential to find the right balance between saving and spending.

Kate Arndt, CFP, is a Financial Planner with Bedel Financial Consulting, Inc., a wealth management firm located in Indianapolis. For more information, visit their website at or email Kate at

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