Stacey e-mailed me because she and her husband had just canceled her family's planned trip to Hawaii -- and she felt terrible about it.
The couple and their preteen son had been looking forward to relaxing on the beach, swimming in warm ocean water and spending quality time together.
But with the economy in a tailspin, their investment portfolio in tatters and her husband's job prospects uncertain, an expensive trip to Hawaii just seemed too big a splurge.
And yet . . .
Stacey knew they only had a few years to enjoy real family vacations before their son left home. They even had money in the bank to pay for the trip. It just seemed scary to spend it right now.
What to do? My answer might surprise you.
Now and later
Smart money management isn't about saving every dollar possible and deferring all gratification, even in a recession. It's about striking a balance between today and tomorrow.That means saving for an emergency fund and investing for retirement. But it also means spending money on the stuff that's really important to you.
- Talk back: Do you think money can buy happiness?
So even when cash is tight, you need an escape valve or two to make sure you're living life now and not just deferring it until later. A vacation, let alone a trip to Hawaii, may not be in the cards, but you still need events to look forward to and experiences that give you joy if you want a well-lived life.
More from MSN Money
"You definitely want to have pleasure in your life," said clinical psychologist Sally Palaian, the author of an upcoming book, "Spent: Break the Buying Obsession and Discover Your True Worth." "The problem is that people don't take any time to think about what they really want. . . . They spend a lot of money on things that don't satisfy them."
Either that, or they panic and squirrel away cash at furious pace, refusing to spend on anything they deem nonessential. Gloomy financial news can send some folks into overdrive, as I wrote in "Is your money making you crazy?"
- Facebook users: Become a fan of Liz Pulliam Weston
You don't want to squander hard-earned money on purchases you'll later regret, but you also don't want to look back at your life and mourn missed opportunities. But how can you strike a better balance? Some thoughts:
Think about what's really important to you. Palaian has her clients develop a life vision that clarifies their most important values, goals and passions. She asks them to spend some time alone thinking in detail about their ideal life. If money weren't an issue:
- Where would you live, exactly? In what kind of home and in what kind of surroundings?
- What would you do in a day, from the time you get up until the time you go to sleep? Account for every hour.
- Whom would you spend time with?
- What interests or passions would you explore?
(If you need more help with this exercise, you can use "20 tough questions for an easier future" to get you started.)
From those fantasies, Palaian helps them cull achievable goals, both short-term and long-term.
- Video: When you shouldn't skimp
Someone who dreams of quitting work to spend more time with his children, for example, may set an immediate goal of arranging weekly outings with his kids and a longer-term goal of taking a sabbatical. Someone who longs to live in Paris might begin by learning French and by saving up for an extended visit. Someone who wants to live by the water might start with camping trips at a nearby lake, then save for a cruise.
Continued: Prioritize experiences over stuff
Rate this Article
High