Treavor Dodsworth CFP®, CPA, CKA®
#11 - Budgeting Savings
I have been pondering this concept recently of budgeting savings- and likely not in the way you think.
I do believe setting a minimum savings amount that gives a reasonable basis for reaching goals is good planning. There is a flip side of this though. Should we be setting a minimum savings amount and also a maximum savings amount? For example, let’s say you have a goal to retire. You have determined that given your available resources you need to save $1,000 per month to reach that goal. What if you have $1,500 per month after taking into account the other uses of money (Giving, Taxes, Debt, and Lifestyle)? What happens to that $500 difference.
Money is just a tool to reach a goal. It is a means to an end. At some point, our planning intentionally to achieve our goals can turn from wise planning to foolish hoarding. I am not going to attempt to answer precisely where that line is as I think it can be different for everyone. I will at least implore you to consider if there should be a cap on saving.
Interesting Article(s) or Video(s) True Hourly Wage - Reclaiming the FIRE Movement for High-Value Work
Kyle Mast, a fellow financial advisor, takes a deeper look at what happens beyond FIRE. “Don’t get me wrong. If you have read any of this blog at all, you will know that I am all about creating more free time for yourself to spend on the things that are most important in life. However, I think we need to realize that one of the important things in life is work. But not just work. High-value work that impacts others.”
John Maxwell - 11 Habits of Successful Thinkers (Free Download)
John Maxwell shares a short story of how his dad thought differently and benefited from it. "There’s no substitute for good thinking. It’s one of the most overlooked essentials of all successful people.
Thank you for reading! Should we cap our savings? Why or why not?