Are You Saving Too Much Money? Ep #229

Is saving for the future preventing you from enjoying your present life? This may be an unpopular opinion for a financial podcast, but it is important to ask difficult questions to experience growth. If over saving is preventing you from enjoying your present life, then you need to make changes.

On this episode of Retirement Starts Today, we’ll examine an article by Darius Foroux that asks, Are You Saving Too Much Money? After the retirement headlines segment, I’ll answer a question from CJ about using a donor-advised fund to offset the last year of high income before retirement. Get ready to ask challenge yourself and explore your financial decisions as you press play.

Get ready to ask challenge yourself and explore your financial decisions as you press play. Click To Tweet

Outline of This Episode

[1:42] Saving too much money for your future could prevent you from enjoying your present life
[4:32] How to know when you’re saving too much?
[6:53] Does it make sense to create a donor-advised fund to get a tax deduction?
[10:22] What other deductions could you take advantage of?

Saving too much for the future could prevent you from enjoying the present

Today is the most important day that you have to live. If you are saving too much money you may not be able to enjoy today to its fullest. There are people that save up to 70% of their income while planning an early retirement, but this type of habitual frugality can get in the way of enjoying life in the present. Although saving a high percentage of your salary could give you confidence about your future, it can be difficult to unwind that practiced frugality to truly enjoy life.

Today is the most important day that you have to live. Click To Tweet

How to know if you are saving too much

If you’re constantly asking yourself on a daily basis how much things cost, you might be saving too much. Try not to calculate your spending down to the penny. Instead, be more conscious of how you spend your money. The balance between spending your entire paycheck and over saving is fluid and complex, so it is important to analyze your situation to understand the best saving situation for you.

There are several factors to consider when analyzing your savings patterns:

How old are you?
What do you value in life?
What type of lifestyle do you want?
Do you have a career you enjoy?
Where do you live?
What are the odds you can do your work until you’re old?
Do you have a support system?

Understanding the answers to these questions can help you recognize whether you are saving too much.

The balance between spending your entire paycheck and over saving is fluid and complex, so it is important to analyze your situation to understand the best saving situation for you. Click To Tweet

How to balance saving for the future while maximizing today

So, how do we balance living in the present and making the most of our lives today while, at the same time, being responsible stewards for our future selves? A good place to start is by coming up with a financial strategy that incorporates your values. Once you do that, you can use the free tools available on the internet to help you determine how much you need to save.

Self-reflection is important to understand whether you are truly living your best life now or if you are waiting for some arbitrary future date to pursue happiness. Are you living your best life now, if not what are you waiting for?