Sometimes saving money means spending it

Finding the balance between spending and saving is often hard to find, but it's very important for creating an enjoyable life.

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My dad taught me the difference between a "want" and a "need" at a very young age (all it took was one attempted order of chocolate milk).

His lesson taught me to be a conscious spender, a habit that has only become more valuable since entering the real world and managing my own money in an expensive city like New York.

It also led to a rather utilitarian budgeting philosophy: Don't spend money... ever.

For too many months to count after graduating college the spring before last, I didn't purchase much more than instant oats, toothpaste, and other bare necessities.

I was so focused on saving that I completely ignored the counterintuitive money advice my mom has been quietly preaching since I earned my first paycheck in high school: It's OK to spend—and sometimes, saving means spending money.

Over the years, she's told me that it's OK to spend on good things, meaning experiences that will make you happy or things that will pay off in the long run. She's defined quality spending, encouraged me to invest in things that have value, and politely pointed out when I'm being cheap, rather than frugal.

I simply dismissed it all as bad money advice. After all, any advice involving spending can't be good, right?

I experienced an "aha" moment about a year and a half ago, when I uncharacteristically splurged on a ticket to the Boston Ballet production of "The Nutcracker." Engaging in the holiday tradition was an enriching experience, and I got to spend quality time with friends. It was completely worth it.

It seemed my mom was onto something, so I actually started listening to her. It took the past year and a half to fully grasp what she was getting at, but I now see that she was giving me the freedom to spend my own money.

As a result, I now say "yes!" to more activities with a price tag on them and trade in my low-cost oats for the occasional Sunday brunch with friends—I actually experience and live in this electric city I'm lucky enough to now call home.

It also means I'm shopping for high-quality items when it comes to things like clothes and shoes, rather than inexpensive, low-quality things to "save money" in the moment.

While my expense column has expanded since fully grasping my mom's approach, I don't spend aimlessly—I'm not taking cabs to work or dining at Michelin restaurants—and that's the trick.

It took 23 years, but I've found a way to reconcile my mom and dad's contradictory philosophies: I spend without guilt on the two most important things to me right now—my health and my relationships—and live frugally in all other aspects of my life. Their combined approach still keeps me at budget and allows for a healthy dose of life.

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  • Saving and Spending
  • Saving and Spending
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This article was written by Kathleen Elkins from Business Insider and was licensed as an article reprint from May 8, 2016. Article copyright 2016 by Business Insider.
The statements and opinions expressed in this article are those of the author. Fidelity Investments cannot guarantee the accuracy or completeness of any statements or data.
This reprint is supplied by Fidelity Brokerage Services LLC, Member NYSE, SIPC.
The third-party provider of the reprint permission and Fidelity Investments are independent entities and not legally affiliated.
The images, graphs, tools, and videos are for illustrative purposes only.
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