Are You Saving Too Much?

[jeffrey]

...I have to admit this isn't a question I get every day. In fact, I've never gotten it before. Given the spendthrift habits of most Americans, it's just not something that's ever come up. Saving too much? It's almost like asking whether someone can be too rich or too smart.

The fact is, though, it is possible for someone to save too much. Think of it this way. Suppose you scrimp and save your entire life and manage to amass a huge nest egg for retirement, but you're so concerned about squirreling away every cent that you and your family lead drab uninspired lives. Even if you manage to live much better in retirement, would that be a good tradeoff?

You may be able to enjoy yourself in retirement, but what kind of life would you have to look back on? What kind of memories and shared experiences with your family would you have? By no means do I want to equate a happy fulfilling life with spending money. But unless you're an ascetic, happiness also isn't likely to come from continuous self denial.

We've got to achieve a balance. Given our income and resources, we should do our best to experience the joys and pleasures of life available to us today, but at the same time set something aside so that we can continue to experience life's joys and pleasures in the future when we may not have as much income... [read more at money.cnn.com]