By Sara Bristoll

Save. Save. Save. That’s all we seem to hear about these days – saving for retirement. It’s almost as if the sole purpose of our lives from 18 (or whenever we enter the workforce) until we’re 65 is to save for those years after 65, when we’re considered of retirement age. Maybe the experts and financial journalists who talk about this have a point: the average 55- to 65-year-old has just over $100,000 in retirement savings.

While that may not be enough to create a decent (or livable) retirement income, there’s also a point to living life and enjoying your money along the way. The key is finding the balance between saving responsibly and spending wisely. Here are some things to consider when searching for your balance:

  • Review your current income versus expenses. Look at what you’re bringing in and where the money is going each month. Knowing where your money goes is a key step to take before making any changes. (As a member, you can do this in Money Management).
  • Build your savings into your spending plan. In fact, it should be one of the first categories you budget for. Experts recommend a savings rate of 10 percent. Start by contributing enough to receive all of your employer’s 401(k) match; otherwise, you’re walking away from free money. If your employer matches 5 percent dollar-for-dollar, and you contribute 5 percent, you’re already saving 10 percent of your income! BONUS: In most cases, your 401(k) contributions are made on a pre-tax basis, helping to reduce your overall tax burden, and allowing your contributions to grow tax-free.
    After you’ve contributed enough to your 401(k) to receive the employer match, find a little (or a lot) left over to put in to your savings account for emergencies. Three to six months’ worth of expenses (not income) is the usual recommendation. Start with $1,000 and save what makes you comfortable. (Once, you’ve built up your emergency reserves, you can contribute more to retirement if you’re concerned you may still fall short.)
  • Decide what your life goals are. Do you want to travel more? Work less? Go to culinary school or drive a nice car? These goals will probably change over time, but knowing what your goals are will help you focus and be less likely to waste money on less important things. For example, if you love to find the best restaurants in town but don’t care what you drive, you could find more room in your budget for good food by driving a used car you paid for with cash.
  • Don’t go into debt to do the things you love. Yeah, a $6,000 two-week trip to Europe sounds like a blast, but taking three years to pay your credit card off afterward will dampen your ability to pay for future trips. If you’re set on that vacation, create a plan to save for it ahead of time with automatic savings transfers.
  • Be accountable to yourself. Find a way to make yourself stop saying “one day” and really enjoy life as you go. Maybe it’s taking smaller, less expensive vacations every year or a class once a month instead of going to culinary school full-time. Whatever your passion or goals are, set a timeline for pursuing them and make it happen. We all get in this habit of saying, “I’ll do this when that happens.” Then, years pass before we realize we missed out on what could have been an important moment in our life.

Spending and saving is not an easy balance to achieve. It takes work to plan for the long-term and still live the life you want. Luckily, as one of Us, you don’t have to figure this out on your own if you don’t want to. Visit a branch or ArizonaFederal.org to meet with a financial coach for help creating a personal plan for your unique lifestyle.