I received an interesting e-mail from a listener the other day.
"Is there such a thing as saving too much? My husband and I don't have any credit card debt, car loans, etc. We only have our mortgage in the way of debt. I contribute the max to my 401k and also have $75 auto-drafted into a savings account weekly. I think I am doing all the right things, but it often feels like we are 'scraping by.' I think saving is the right thing to do, but my husband feels that I am 'rat holing' money and wants me to loosen up. Is there such a thing as saving too much?"
The answer, in short, is yes. There always has to be a balance between saving and spending. Most of the time, it is the other way around. The spending is way out of line in relation to saving.
You only want to save the amount of money necessary to help you achieve your goals. Thus, you need to save with a purpose. A saving plan needs direction. Without direction, you could catch yourself overdoing it and experience the feeling of just "scraping by."
So, go through this process. Determine what you are saving for. For most of us, that would be retirement. Using that as an example, determine what age you are going to retire. Determine the amount of money you need each month. Determine how long you think that you will need that money being paid to you each month.
Then add in social security, any pensions, and current investments. With all of that data, a financial advisor can tell you approximately how much you need to be saving each month. If you are achieving that monthly amount, then you are reaching your savings goals. That is saving with a purpose!
Having said that, if you find yourself satisfying your goals and tempted to save or spend the excess, look to the true purpose of money – blessing others with it. If you are not tithing, start tithing. If you are already tithing, give way beyond the tithe to other ministries and charities.
Give money a true purpose by blessing others with it.