Life is filled with tough decisions, including the mother of all: do I live in the now, or save for tomorrow?
It’s tough because this is the decision that generally seals our fate. Most of us would rather not think that far ahead; after all, retirement is decades from now. We often feel that we can’t afford to do both. And the expression “you only live once” (YOLO) is a temptation to put off tomorrow while you live in the moment.
Other ways we put off saving for our future — and this is where it gets heavy — could be the blame game: our parents, our government, the banks, the system. The feeling that everything is already rigged against us makes it easy to live life without an end plan.
If you would like to change your way of thinking, try this splash of cold water: imagine yourself at age 65. Where will you be living? How would you be paying for food, heat and electricity? Will you be existing solely on Social Security (if it’s still around)?
We’re not trying to scare you, even though the thought is scary. In fact, there are solutions to this dilemma that you can put into action today. We’re going to show you that there is a way to have your cake and eat it too. You can save for the future while living your current life to the fullest.
Follow these simple steps to live in the now while saving money for the future.
Start With a Clear Eye
Get a bird’s eye view of your situation and the way you roll by devising a list of questions that get to the heart of the matter. Give serious consideration to the quality of your crib, your wheels, your wardrobe, and other materialistic matters. Don’t forget to asses the even more important stuff, like the degree of your happiness and spirituality, your romantic life, your circle of friends, and so on. You don’t have to share this list with anyone, so don’t be afraid to get really honest.
Divide Your Goals into Categories
Distinguish the goals that address your wants from the goals that will take care of your needs. All of this should be based on your income and financial standing as it is at this moment. Try your list this way:
Write down all the things you want to do before you die, and get busy checking them off. Parasailing? Learning French? Cooking a multi-course meal? No goal should be out of reach. The idea is that, eventually, you will have the satisfaction of having lived your life to the absolute fullest.
Make a list of the ways you want to spend your golden years. Will you have the money to cover these goals? What must you do now in order to reach those financial goals? For some perspective, see if your on track for the retirement you want with our retirement calculator.
Take a cold, hard look at what you’re spending, and where. Include your rent/mortgage, utilities, transportation-related payments, groceries, wardrobe, eating out, and other assorted obligations. See where you can make cuts or reductions, and where you can redirect that spending into a retirement or emergency fund.
You don’t have to cut your budget so close to the bone that you’re life becomes dull; it may take a while to figure out just the right balance between living in the now and saving for the future. It could mean something as simple as brown-bagging your lunch or taking the bus to work instead of your car. You also don’t have to fix any spending that isn’t broken. If it’s working for you, keep it.
Current Income and Savings
To get a good understanding of where you can go from here, make a list of all your sources of monthly income. This includes your take-home pay (after taxes!), your retirement and savings accounts, Flexible Spending Accounts (FSA), and your emergency fund and vacation fund.
Create a detailed list of what you owe to creditors and lenders every month, including credit cards, school loans, and any other loans. Once organized, you can start deciding on a debt repayment plan that best suits your situation.
Evaluate Your Financial Situation
Be brutal in your estimation of where you stand. Ask yourself if you think you are saving enough for retirement, if you are paying your bills on time, if you are happy with your credit score, and if you have enough disposable income to have the fun you want to have (after your responsibilities are met).
Review and Revise
Once you discover your weak links, you’ll need to figure out how to change, adjust or alter your lifestyle. The emphasis for improvement should be more on the things you need. Once you take care of that, the things you want will be easier to achieve.
Start On Your Spending Cuts
Now that your entire financial life is laid out before you and you’ve realized your priorities, it’s time to get the scalpel. See what you can cut out completely, or at least reduce; see if there is a way to pay off your debt faster.
Adjust Your Plan Where Needed
The closer you watch your spending and the the more proactive you get with monitoring and switching up your budget, the more cash you may see become available for your future. It may take some trial and error, but don’t give up and don’t allow yourself to fall short of your goals. Always keep them in front of you, and understand that sometimes painful changes in your current situation can lead to incredible improvements in your life and your future.
Start an Account to Start Saving Money
Rather than use credit cards for the things you want now (vacations, tech, wardrobe, etc.), open separate savings accounts dedicated to each individual goal. For instance, label one savings account “Trip To France.” Label the next one “My New Laptop.” Even if you can only contribute a few dollars a week, your goal will get nearer with each deposit, and you’ll be able to pay for your goal in sweet cash. That saves you from getting deeper into debt and paying more interest, and helps you save for the future more effectively.
SoFi Money®, a cash management account, may be able to help you see this through. SoFi Money earns you 0.20% Annual Percentage Yield on all your cash and has no account fees.
We work hard to give you high interest and charge zero account fees. With that in mind, our interest rate and fee structure is subject to change at any time.”
Introducing SoFi Money®
Sometimes a plan like this can feel overwhelming and even hopeless. It’s a common feeling, but don’t let it get the best of you. Consider getting some help without it costing you a penny. SoFi Money can help you track your spending in your weekly dashboard all within the app.
SoFi Money is a cash management account where you can spend, save, and earn all in one place. Once you are able to stick to your goals and your budget with the help of SoFi Money, your lifestyle can change for the better and your financial situation can improve.
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA / SIPC . Neither SoFi nor its affiliates is a bank.