When You're Saving Aggressively, It's Easy to Forget How Well You're Doing

01.29.08 | Money | 1 Comment | by junger

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We've got some pretty aggressive savings goals for the near-term future, mostly centered around buying a house while still contributing a lot to my 401(k) and to both of our Roth IRAs.

And we're doing a really successful job, too; we've got automatic transfers going into our housing fund every month (in addition to automatic Roth IRA contributions), we track our spending and live within our means.

But when you have such aggressive savings goals, sometimes your mentality overpowers reality.

I forget sometimes that we are doing a great job saving for a house and for retirement (and have an emergency fund, too). I want to save as much as we can — I think I am going put nearly my entire 2007 bonus toward the housing fund — and succeed.

But there's a line between being a smart and aggressive saver and just being cheap. I try hard not to cross that line — having money is not the goal. Creating a happy life for my family is the goal. Money is just the means to the end.

The next time you think you're being cheap, step back. Think about how well you're doing on your savings goal and how much the situation is going to affect your bottom line.

This isn't an excuse to go out and buy whatever you want; it's a reality check to determine if you're saving for the right reasons.

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