The challenges of the last couple years have filled many of us with uncertainty about the present and concern for the future. How might you balance in-the-moment enjoyment with your family’s long-term security?
- Give yourself permission to spend.
Old-fashioned financial planning puts a heavy emphasis on saving and investment goals you need to hit on your way to retirement. Folks who follow this model are often extremely focused on “hitting a number” above all other financial considerations. Often that means living more frugally and working longer than they really need to.
A healthier approach might be to pay yourself first by making automatic monthly contributions into your retirement accounts, budgeting for the month’s expenses … and then having a little fun! Yes, a solid financial plan includes setting some limits and monitoring your progress. But within those boundaries you should still have room to replace your old car, build a patio, or take a family holiday you’ve been putting off for too long.
- Build up reserves.
One of the golden rules of financial planning is: “Plan for what you know is coming and prepare for what you can’t see.”
To that end, we often advise our clients to create a special savings reserve, ideally in a separate bank account. These are the funds that you will rely on if there’s a sudden emergency.
If you have the resources to improve your Return on Life now but you don’t feel free to enjoy yourself more, you might need to reassess your relationship to your money.
One question we often discuss with our clients is, “What is your money really for?” The ultimate purpose of money isn’t to keep earning more of it. Your money is supposed to be a vehicle that takes you from where you are right now to where you want to be. And, hopefully, along the way, you use your money to take some pitstops where you can enjoy the sites, the people, and the activities that make your life worthwhile. Too many people who wait for “the right time” to enjoy the rewards of a lifetime of hard work find that “the right time” never comes.
Are you having trouble connecting your time and your money to your top priorities? We have an online tool that can help you to understand your feelings about money and where those preconceptions come from and where to go next…