It is prioritized by some people to save the budget, as it builds strong confidence and would be ready for emergency funds, while others prefer to spend them without keeping it at all. In my view, it is better to take a balanced approach by using several methods of making a financial plan.
Having some amount of money in the bank account helps to be ready for emergency funds. This means that when a person saves money, they build a strong sense of confidence and would face life’s difficulties courageously. To be more specific, the world does not operate linearly, and people may have difficulties with accommodation, tires, and even having a risk of losing a job, and that already kept money would help to overcome those situations effectively. A good case would be a book called “The Psychology of Money,” where the author highlights such difficulties and the importance of keeping finance for emergency situations. Thus, saving money not only builds confidence but also helps to feel preserved in a safe zone whenever some emergencies happen in a person’s life.
From side of pleasure, it would much more enjoying to spend earned money for the desires. While people spending their money they are likely increase their dopamine offed called as happy hormone which enables them to boost their mood. Therefore, a sense of pleasure helps to reduce the level of stress and anxiety resulting better well-being. Furthermore, spending money on own needs leads to higher self-esteem where I person will love himself and prioritize himself at anywhere. According to some scientific researches, people who spends their earned money on themselves are happier compared with those who keeping money and have less serious mental problems.
Nevertheless, from my point of view, instead of choosing one of these approaches, it would be more efficient to balance them. In order to achieve that, there are some methods for effective usage of money by classifying important payments and leaving some amount of money for wants. One of them is called the 50/30/20 rule, where from 100% of the money, 50% is for needs such as rent, groceries, and debt; 30% is for pleasure and personal needs; and 20% is for saving for the future. Based on several questionnaires from scientists and business entrepreneurs who succeeded in their careers this method is highly effective, resulting in a better quality of life. Such rules are methods are millions where every person can choose the appropriate one for them, where the main purpose of it is balancing, where a person has a chance to save money and use it for their own needs like pleasure.
In conclusion, even though saving money and spending it is a question of concern where people have their own view about it, I’d say that for the best result, it is better to balance between two financial plans via different rules and methods, such as the 50/30/20 rule.