Understand Money Past, Present And Future

It is important to strike a balance between the desire to prepare for the future and save versus the impulse to live for the present and enjoy earnings now

There’s no denying that we’re living in an age of instant gratification. We’re constantly told to “live the moment” without a thought of tomorrow. The problem is, tomorrow always comes, and we’re increasingly less prepared for it.

Retirement savings, for instance, are falling by the wayside. While we all imagine our golden years to be just that, golden, this requires long-term planning and foresight. Every day, we face tempting opportunities to spend money. A sea of indulgences can distract you from investing for your future. “Buy now!” “Pay after one year!” “Don’t pay interest for six months!” Everyone everywhere is urging you to spend, spend, spend. I’ve even seen a “Vacation now, pay later!” advertisement in the newspaper. But every money you spend now is a money in lost investment opportunities that could have grown a lot more in the long run.

In my work with younger clients, that’s one of the main conflicts I see: The desire to prepare for the future and save versus the impulse to live for the present and enjoy earnings now. People know that nobody is promised a tomorrow, but they also don’t want to live out their retirement years with limited choices, or none at all.

So how can people strike a successful balance between these seemingly competing desires? Based on my work with financial planning clients, here’s my six-step plan:

Understand your cash flow.