Why? Because we are often our own worst enemy when it comes to maintaining our financial health.
A common fallacy is the assumption that we’ll be better people in the future. We think, “Oh I can eat this whole pizza. It’s fine! Tomorrow I’m starting a diet anyway.” But tomorrow never comes. Or if it does, we are shocked by how much we underestimated the damage we did to our fitness goals.
The same is true of your finances. To improve your finances you’ve got to remember that your future self likely won’t have any more self-control than you do today. Once you’ve taken the time to decide what your most important goals are, do what you can to make it easier to stick with those goals in the future. Besides, don’t you like your future self?
Optimize Your Savings in Advance Because…
1. When You’re Tired You May Forget Your Goals
You’ve had a long day. Maybe you’re working a second gig to bring in extra cash. You look at your watch and see that it’s 8:00 PM, you have a 45 minute commute and you still haven’t eaten. In that moment when you’re exhausted your first thought is often going to be, “don’t I deserve a break?”
When you’re tired it’s easy to forget all about how every dollar helps get you closer to your dream of paying off your mortgage. The immediate reward can be quite difficult to resist. To prevent that, set up your finances to protect you in your weakest moments. Plan ahead of splurges, set up your funds to go into savings automatically so that the money isn’t even there to tempt you.
2. Small Purchases Really Do Add Up
Sometimes it’s just a burger; sometimes it starts as sushi then turns into buying rounds of sake for everyone. Depending on where you are in your financial journey, those little convenience splurges can really start to add up. If you’re not paying attention you could end up shelling out big bucks for things that you won’t even remember. You’ll find yourself looking at your bank balance wondering why you’ve got nothing to show for the $1000 you spent without even realizing it over the last quarter.
3. Winging It Is Risky Business
If you decide that you want to save for a specific goal, it’s a whole lot easier to set your funds to automatically transfer to your savings account now. Don’t give yourself the chance to renege. Make it easy to keep your promises to yourself.
Remember that no matter what, life keeps happening. What will you do when a friend you haven’t seen in a while invites you out to a steakhouse or to go on a weekend trip to the Caribbean? Will you have to pull out a pen and paper to figure out what expenses you have left this month? Will you be clueless about whether you have free cash? Or will you be ready with a spending plan that lets you say “yay” or “nay” almost immediately. If you have the money, you go to Aruba. If you don’t, you talk your friend down to something a little more enjoyable.
Give Your Future Self A Break
Take the time to sit down and think about your long term personal, professional and financial goals. Then, give your future self a break! Once you set your goals and then make it easy to stick to your plans. Optimize your savings today to set yourself up a healthier financial future.
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