Finding a Balance in Financial Planning: The Tale of Two Fathers
One father spent freely and didn't save, while the other obsessed over saving. Neither flourished in retirement. Here are four steps to avoid either scenario.


When it comes to financial planning, finding the right balance between saving for the future and enjoying the present can be a challenge. In my family, I have seen polar opposite approaches to financial planning, with my father and father-in-law taking vastly different paths.
Both men were highly successful at what they did for a living. My father was a surgeon whose analytical mind would lead to overthinking situations, resulting in no action or a very conservative approach when it came to his financial decisions. He worked hard, lived modestly and always worried about putting away a portion of his income for a rainy day. His attitude toward financial planning was one of caution, built upon his worry about the future. And while my father had a substantial nest egg to fall back on in his retirement, he was never able to enjoy it.
On the other hand, my father-in-law lived in the moment. He worked in the entertainment industry and lived large without worrying about the future. Instead of saving, my father-in-law splurged on luxuries like cars and entertainment. He enjoyed life to its fullest and was known for his generosity, but he did not consider the long-term consequences of his spending. As a result, he did not have the savings or investments to support himself later in life, which left him to struggle financially.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The contrast between my father and father-in-law’s approaches to financial planning highlights the importance of finding the right balance between saving for the future and enjoying the present. While balancing between these two extremes can be a challenge, it is crucial for long-term financial stability and personal fulfillment.
While there’s no one-size-fits-all approach to spending and saving, there are several best practices that can help you navigate the balance.
Create a basic budget. Every financial plan requires a budget. One classic approach to budgeting is the 50:30:20 method — spending 50% of your money on day-to-day necessities, 30% on discretionary costs and putting 20% into savings.
While this can be a suitable place to start, it does not work for everybody. That is where a wealth adviser comes in. These professionals can help you determine the right approach for your lifestyle and help you stay the course when markets are volatile or if you start to dip into old spending habits.
Start saving early. When it comes to saving, you will often hear people say, “I wish I had started earlier,” and it is true. As soon as you enter the workforce, you should start putting away funds for your future. The earlier you start contributing to a 401(k) or other qualified retirement plans, the more comfortable you will be down the line.
Prepare for what-ifs. Life is filled with unexpected changes, and with that top of mind, always consider the “what-if” scenarios. There are many outside influences that can come into play as you work toward your goals, so you must be prepared for how to manage them as they arise.
Creating an emergency fund can provide peace of mind and ensure that you are not devastated by healthcare or financial situations. In addition, think through whether you have the appropriate life insurance and long-term care coverage to address unexpected health issues.
Collaborate with a financial planner. To put these best practices into action and address more complicated needs, it is OK to ask for help. It can be difficult to be objective about your own spending behavior. A financial planner can propose strategies to meet your short- and long-term goals.
Whether it is buying a home, paying for your children’s education or saving up to purchase your dream car, there are many ways a planner can help you achieve these goals by crafting a customized plan that accounts for a range of possibilities.
Living in the moment while carefully planning is possible — but do not go at it alone. A financial adviser or financial planner can help you live the life you want today without impacting your tomorrow. Citi also has some helpful financial planning tools.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Chuck Cavanaugh is the Head of Financial Planning for Citi U.S. Consumer Wealth Management, where he is responsible for leading the financial planning team. The team works with clients to develop and implement financial plans, including estate & trust planning, charitable giving, intergenerational planning, business succession, secured retirement income, risk mitigation and wealth protection.
-
Striking Gold (or Gas): A Financial Pro Unpacks the Nuances of Energy Investing
Investing in the energy industry, particularly oil and gas, involves understanding the facts about how projects generate returns through cash flow and long-term asset building, while also being aware of the risks.
-
Escaping the New Golden Handcuffs: A Financial Expert Has a Plan for Today's Executives
Feeling stuck in your job? It could be your complicated compensation package, but it also could be where you live, your family or even how you view yourself.
-
I'm a Financial Planner: Here's How to Invest Like the Wealthy, Even if You Don't Have Millions
Private market investments, once exclusive to the ultra-wealthy and institutions, have become more accessible to individual investors, thanks to regulatory changes and new investment structures.
-
Four Ways a Massive Emergency Fund Can Hurt You More Than It Helps
Saving too much could mean you're missing opportunities to put your money to work. Redirect some of that money toward paying off debt, building retirement funds, fulfilling a dream or investing in higher-growth options.
-
I'm a Financial Planner: How to Dodge a Retirement Danger You May Not Have Heard About
Timing is everything, and sequence of returns risk can mean the difference between a retirement nest egg that's overflowing … or empty.
-
Caring for Aging Parents: An Expert Guide to Easing the Financial and Emotional Strain
Early conversations, financial planning and understanding the progression of care needs can help to mitigate stress and protect family relationships.
-
I'm a Financial Adviser: The OBBB Is a Reminder for Older People to Have a Long-Term Plan
The new tax bill presents a good opportunity for retirees to revisit tax plans, look into doing some Roth conversions and consider plans for long-term care.
-
I'm an Insurance Expert: This Is Exactly Why Your Insurance Rates Are Soaring (and What You Can Do)
A dramatic rise in the frequency and cost of severe weather and wildfires means you need to prepare, prepare, prepare — no matter where you live — for higher premiums.