Personal Finance

We make $250k in a low cost of living area - my wife wants to spend more on family experiences but I'm worried

Joey Frenette

Published: December 10, 2024 8:36 pm

Saving for the future is a prudent decision and one that’s sure to reap incredible rewards at a later date. While it’s almost always a good idea to choose to pay oneself first by contributing more of one’s monthly paycheck to a retirement account, it’s also not great to deprive yourself of the experiences and joys you could have in the present. Don’t get me wrong, delayed gratification is such a great thing. However, I believe that, like with most things, it’s key to find the right balance.

On the one hand, you could save up every dollar possible with an aggressive budgeting plan in place and make all the right moves to pay off debt, invest, and give your nest egg everything it needs to grow quickly (and safely) and tell yourself that the joys and experiences will come at a later date (likely after one has retired).

On the other hand, you could be overspending on the present, neglecting the retirement fund, giving into “lifestyle creep,” and finding yourself living paycheck to paycheck like a lot of Americans despite earning a solid wage.

Key Points About This Article

• As a saver, it can be tough to justify spending more on experiences. However, if there’s a clash between couples, some compromises should be made.
• The couple under question can afford to spend more on family experiences. It’s just one member has some unwarranted financial anxiety about spending more, in my opinion.

Finding the right balance between spending and saving is key

Though being overly frugal is far better than spending every dime of income that flows in, I still think there can exist a financial plan that allows one to save without having to be overly frugal and not take advantage of the experiences that one may not have once they’re older in their golden years.

In this piece, I’ll give my reaction to a couple who went to Remit Sethi in search of some advice.

They face a bit of a dilemma, with the caller’s wife wishing to spend a bit more on comforts and conveniences (they can surely afford it with an income of $250,000 per year) rather than making the most cost-conscious move in most circumstances. Of course, family dynamics can be a bit choppy when one person is a saver, and the other is more of a spender. Either way, I believe that spenders and savers can work together to find the best balance. Arguably, finding such a spend-save balance is a good thing.

Sethi may be a personal finance guru who’s all about padding the nest egg. However, he’s also a big fan of “guilt-free” spending and not having to scrape by to maximize contributions to their retirement.

Indeed, Sethi wants us all to live what he calls a “rich life” by spending money on things that bring one joy and axing non-essential expenses that don’t. Personally, I’m a huge fan of Sethi’s philosophy and think that there’s more to life than just saving for retirement and delaying gratification until an advanced age.

Further, Sethi thinks the couple should allocate a portion of their income towards “guilt-free spending,” which allows flexibility to spend more on things like experiences, comforts, conveniences, and other things that bring both or one of the family members utility.

The bottom line

I couldn’t agree more with Sethi. Clearly, the family brings in more than enough income to afford to splurge on experiences without feeling guilty that they didn’t make the biggest contribution to savings in any given week or month.

Though I’d encourage the couple to consult the services of a professional (think a wealth planner or adviser), I do think there’s nothing to be worried about by spending more on experiences. It doesn’t have to make one guilty. And there’s certainly nothing to worry about.

I’d argue that “lifestyle creep” is only insidious if it creeps up on someone without them noticing, and they spend money on things that don’t actually bring them joy but perhaps allow them to keep up with the Joneses, so to speak.