We all want to enjoy our lives right now. After all, we work hard, so it’s natural that we might want to treat ourselves every now and again. Whilst that’s fine up to a point, many people resort to using credit cards to buy such treats and that’s usually where the problems start, because most of us find ourselves buying things without having any plan to pay for them down the line. Whilst that might not seem to cause a problem in the short term, in the longer term we’re really shooting ourselves in the foot.
This blog is therefore all about balance; that balance between having cash now and the life you want to live now, versus the life you want to live later. Sure, we absolutely need to enjoy life today but we also need to have a very clear idea of what we want our later life to look like in terms of lifestyle, and then we need to think about how much money we’re going to need to facilitate that lifestyle so that we can start putting some money away today. If you go through life not thinking about it, just thinking things will work themselves out automatically without you having to do anything, unfortunately the chances are that that’s not going to happen.
Of course, the above theory works both ways. Some people are very diligent savers and actually spend virtually nothing now because they’ve chosen to put everything aside for their future. Whilst it’s great that they’re putting some money aside, the reality is that none of us have a crystal ball and some of us might not make it to retirement. That’s why balance is equally important for everyone.
So how might this work in practice? Well, for example, if you get any kind of windfall, I would suggest spending some of it now (maybe a quarter of it), but put the lion’s share aside for your future. You’re used to living without that money so you won’t miss it. Similarly, now’s the time to take a look at the rest of your expenses. The first step in achieving that balance we’ve talked about, is being able to live within your means. At the end of the month, once you’ve paid all your bills and other expenses, is there any money left or have you had to use your credit cards?
Once you can live within your means, you can start to set aside a regular amount every single month for your future. Start as small as you need to. The point is you’re getting into the right habit and over time you can gradually increase the amount. Once you start doing this, you’ll be surprised at how easy it is to follow. But the point is that you’ll be achieving a balance, both in terms of your money but also in terms of your lifestyle and ultimately you’ll achieve greater happiness.
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