
Finding financial harmony is one of life’s great challenges. You have many important financial goals: paying off debt, building your savings, and investing for the future for starters. But, as a human adult, you likely have competing desires to spend money and enjoy life: things like traveling, skiing, or playing video games. With these conflicting priorities, how do you strike the right financial balance without sacrificing present happiness or future security? Keep reading to learn how to manage your money wisely while still living life to the fullest. If you’re starting from zero (or, worse, with debt to pay), the first few steps could take a while and won’t likely lend themselves to much fun initially, but they are crucial to striking a proper financial balance.
Prioritize your debt
Debt can feel like a weight holding you back from true financial freedom. If you’re dealing with debt, your first steps are to understand exactly what you owe, make at least the minimum payment on all debts, and create a plan to pay it down. Start by making a comprehensive list of your debts, including the outstanding balances, interest rates, and minimum monthly payments. Sort your list by interest rate and take a closer look at the balances.
- High-interest debt accrues interest quickly, such as credit cards and personal loans
- Low-interest debt generally has lower interest rates, such as mortgages, student loans, and auto loans
Choose a debt-repayment strategy that keeps you motivated and works for your financial situation. Two popular methods are the snowball method (paying off the smallest balances first) and the avalanche method (paying off the highest-interest debt first).
Establish a financial safety net
An emergency fund will help you take care of substantial expenses that you cannot plan for, such as unexpected medical bills, car repairs, or last-minute travel expenses. Aim to set aside enough money to cover three to six months of essential living expenses. This amount may feel overwhelming, but you can start small. Even setting aside $50 per month will make a difference over time. The key is consistency.
Embrace budget-friendly activities
You don’t have to cut out having fun while repaying debt or building your emergency savings. Find free or low-cost activities in your area to keep your financial strategy on track. Ideas include attending community events, exploring local parks and hiking trails, or visiting a museum on a free or discounted day. Try taking day trips and opt for staycations instead of footing the bill for an expensive getaway. Tackle an old project around the house or take time to digitize your physical photographs. Catch up with family members and friends that you haven’t talked to in a while. Learn a new skill and lean in to giving handmade gifts as a heartfelt way to show someone you care.
Invest for the future
With your debt-repayment strategy and emergency fund in place, now it’s time to look forward. A common question at this stage is deciding whether to aggressively pay down all debts or begin to put some money aside for other goals, like retirement. When choosing between paying down debt or investing for the future, Fidelity advises following the rule of 6%. This rule suggests that it is often best to pay down any debt with an interest rate of 6% or greater and invest your extra dollars toward the future. Put another way, if your debt is manageable and your emergency fund is in place, consider investing for long-term growth.
If you’re ready to start investing in your future, consider these retirement plans:
- Employer-sponsored retirement plans
- Individual retirement accounts
- Defined benefit plans
- Money purchase plans
- 457(b) deferred compensation plans
Many FPPA Members belong to one of our defined benefit (pension) plans and/or a deferred compensation plan like a 457(b) or 401(a). Get to know whatever plan you’re in, contact FPPA with any questions, and start looking forward to your next adventure.
Push past the tipping point
It can feel like a lot of work to pay down debts, build an emergency fund, and start preparing for retirement. But, with these important tools in place, you’ll be on a solid financial footing to responsibly spend more of your budget on activities that truly get you excited.
Live in the present
Finding financial balance includes enjoying life. Personal fulfillment is just as important as saving and investing.
- Budget for joy: Set aside a portion of your income for guilt-free spending on dining out, hobbies, and experiences
- Practice mindful spending: Focus on spending money on things that you truly want or need instead of impulse purchases
- Practice mindful spending: Focus on spending money on things that you truly want or need instead of impulse purchases
Save toward personal goals
Life is more than paying bills, saving for retirement, and short-term spending. You have dreams and aspirations that deserve attention, too. Choose specific savings goals for things that matter to you, such as:
- Buying or renovating a home
- Purchasing a new car
- Starting a business
- Taking a dream vacation
Set up a dedicated account for each goal and initiate an automatic direct deposit on a regular basis. Even small contributions add up over time.
Adjust as needed
Life changes, and so should your financial plan. Reevaluate your priorities regularly and make adjustments based on your current situation. For example, if you get an influx of cash such as a bonus, consider increasing your savings and investments while still allowing room for extra enjoyment. If unexpected expenses arise, make budget adjustments or utilize your emergency fund accordingly.
Finding the right balance between debt repayment, saving, investing, and enjoying life is key to financial well-being. By tackling debt strategically, building an emergency fund, investing wisely, and saving for what matters most, you can create a financial plan that allows you to enjoy life with minimal financial stress.

Clarissa Flynn is the Content Specialist for the Fire & Police Pension Association of Colorado. When not delivering meaningful emails, social media, and blog posts to FPPA members, Clarissa enjoys exploring Colorado state parks and picking up new crafting hobbies.