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.
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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 Checking and Savings®, a checking and savings account, may be able to help you see this through. SoFi Checking and Savings 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 Checking and Savings®
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 Checking and Savings can help you track your spending in your weekly dashboard all within the app.
SoFi Checking and Savings is a checking and savings 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 Checking and Savings, your lifestyle can change for the better and your financial situation can improve.
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SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.
SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet..