2647: [Part 1] Could You Be Saving Too Much Money? by Jessica Jokisch of ChristineLuken.com

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[00:00:55] This is Optimal Finance Daily, Episode 2647.

[00:00:59] Could you be saving too much money?

[00:01:01] Part 1.

[00:01:02] Buy Jessica Yolkish with christineluchen.com

[00:01:06] And I'm your host and personal finance enthusiast, Diana Mariam.

[00:01:10] Today I have a longer article for you.

[00:01:13] So what I'll do is split the article up, reading the first part today and finishing it up tomorrow.

[00:01:18] So with that, let's dive right into part one as we optimize your life. Could you be saving too much money?

[00:01:29] Part one by Jessica Yolkish with ChristineLukin.com

[00:01:35] Could you be saving too much money?

[00:01:37] That is the premise of the book I just finished reading

[00:01:40] called Die with Zero by Bill Perkins.

[00:01:43] I picked it up somewhat reluctantly because dying with zero money

[00:01:46] seems to go against everything I've learned about personal finances over the past two decades.

[00:01:51] And many of the clients I work with are behind on their savings and retirement goals.

[00:01:56] I dove into the book anyway, trying to keep an open mind.

[00:02:00] I'm glad I did.

[00:02:02] Saved money is meant to be spent eventually.

[00:02:06] I agreed with the author wholeheartedly on this point.

[00:02:10] We've been conditioned to see saving as good and virtuous and spending as bad and irresponsible.

[00:02:17] This bothers me a lot.

[00:02:19] I frequently say that spending and saving are two sides of the same coin.

[00:02:24] Saved money is meant to be spent, at least eventually.

[00:02:28] We save for retirement so we have money to spend when we're no longer working.

[00:02:32] We save for our kids' education so the money is available when the college bill comes in

[00:02:37] the mail.

[00:02:38] We save for emergencies so that the money is there to take care of them when they occur.

[00:02:44] Saving just to have money for no purpose is rather purposeless.

[00:02:49] According to the author, the trick is to arrive at the grave as close to zero as possible.

[00:02:55] You might want to spend it sooner than you think.

[00:02:58] I'm a big fan of enjoying life while you're working on your various long-term goals.

[00:03:03] With Die with Zero, Perkins advocates spending money earlier than most financial pros do.

[00:03:08] We think we should save until retirement hits, then flip the switch to spending.

[00:03:14] Saving leads to retirement, which leads to spending.

[00:03:18] There are two problems with this.

[00:03:21] 1.

[00:03:22] People have a hard time switching gears from saving to spending with ease. If you've

[00:03:27] spent most of your adult life ingrained in the savings habit, you're going to find it

[00:03:31] hard to do a complete 180 and feel safe spending your money down. I find it's better to have

[00:03:38] a balance of saving and spending on meaningful experiences from the get-go.

[00:03:42] 2. Some life experiences are better

[00:03:46] when you're younger.

[00:03:48] I felt internal resistance to this one

[00:03:50] because even though I'm 48,

[00:03:52] I still feel like I'm 33-ish.

[00:03:55] But let's say you have a dream of surfing in Hawaii

[00:03:58] or snowboarding in Alaska.

[00:04:01] You're going to have a better experience doing it

[00:04:03] when you're 23 versus 53.

[00:04:06] When you're young, you typically have an abundance of time and health, but a lack of

[00:04:11] money. As we age, our financial resources increase as our health and time dissipate.

[00:04:17] Certainly, there are things we can do to increase and maintain our health. But I think we can all agree that surfing or snowboarding

[00:04:25] can be done by most 18-year-olds, but by very few 78-year-olds. And trips like this are

[00:04:31] easier to take before we settle down with serious responsibilities like having kids in

[00:04:36] a career. The author of Die with Zero even advocates borrowing money for these experiences,

[00:04:42] which I have a hard time endorsing.

[00:04:45] Consumer debt causes stress and can become a lifelong habit.

[00:04:48] So I'd prefer a young person to work a second job

[00:04:51] or some overtime to fund a dream like this.

[00:04:55] Knowing your expiration date.

[00:04:58] Maybe you're seeing the logic

[00:04:59] and not oversaving for your elder years.

[00:05:02] I mean, how much money do you need

[00:05:04] to sit comfortably

[00:05:05] in an easy chair and watch days of our lives

[00:05:07] when you're in your 90s?

[00:05:09] The big question mark in the formula is,

[00:05:11] how long will I live?

[00:05:13] None of us can answer this with 100% certainty.

[00:05:17] You could live as long as George Burns, 100,

[00:05:20] or you could be hit by a bus tomorrow.

[00:05:23] Borrowing bus accidents and the like,

[00:05:25] you can get a reasonable estimate of your lifespan

[00:05:27] by using a life expectancy calculator,

[00:05:30] like the one at Project Big Life.

[00:05:33] In less than three minutes,

[00:05:34] it's stated mine as 90 years old,

[00:05:36] way short of my goal to live to be 120,

[00:05:40] as long as I can remember my name and wipe my bum.

[00:05:43] Whether it's correct or not isn't really the point.

[00:05:46] Knowing that I might only have 42 years of life left

[00:05:50] helps me be intentional with my spending

[00:05:52] and saving decisions.

[00:05:54] If there are things on my live list,

[00:05:56] a better alternative to a bucket list

[00:05:59] that are health dependent,

[00:06:00] I should start pursuing them now rather than later.

[00:06:04] I wanna get Scuba certified within the next year or two, so I have plenty of time

[00:06:08] to enjoy the ocean while both my husband and I are in good health.

[00:06:12] Many people live on autopilot, working like crazy, thinking they'll spend money and enjoy

[00:06:17] life later.

[00:06:19] But when later comes, they're too tired, old, and unhealthy to enjoy in.

[00:06:24] Prioritize buying memory capital.

[00:06:28] Hear that on tomorrow's episode.

[00:06:34] You just listened to part one of the post titled,

[00:06:37] Could You Be Saving Too Much Money?

[00:06:39] by Jessica Yolkesh with christineluchen.com.

[00:06:43] And I'll be right back with my commentary.

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[00:08:01] How do you feel great on vacation?

[00:08:03] Like really good?

[00:08:05] Easy!

[00:08:06] You go to Aruba.

[00:08:07] You'll spend your time relaxing on cool white sand beaches and floating in healing

[00:08:13] blue water.

[00:08:14] You'll immerse yourself in natural wonder and find your center on an island where

[00:08:18] things move at your speed.

[00:08:20] You won't just feel great.

[00:08:22] You'll feel relaxed, renewed, and ready for life.

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[00:08:31] This reminds me of something I read from Paula Pantones.

[00:08:35] She describes saving as deferred spending.

[00:08:38] I think we forget about this when we treat having money as the end goal.

[00:08:43] But when we really think about it, money is just a tool that can be used to live a life

[00:08:48] focused on what matters.

[00:08:50] Money itself doesn't matter, and if your goal is to just sit on a big pile of money

[00:08:56] without any purpose for it, well, you might find yourself tragically unfulfilled when

[00:09:01] you reach that goal.

[00:09:03] I've come to learn that money is only as valuable

[00:09:06] as your clarity on how you're going to use it

[00:09:09] and your comfort level of how much is enough.

[00:09:12] The money you're saving for deferred spending

[00:09:15] benefits from having clarity

[00:09:17] and the money you're investing

[00:09:19] can lead to financial freedom

[00:09:21] as long as it eventually feels like enough.

[00:09:24] But that's just the first half of the post.

[00:09:26] I'll finish the rest for you tomorrow.

[00:09:29] So with that, have a great rest of your day, and I'll see you back here tomorrow for part

[00:09:33] two, where your optimal life awaits.