Savings are vital for the future while a good life is valuable now. Students, early career professionals and others with limited means often wonder if it may be possible to have both. This article explores how such an expectation is not only realistic but reasonable.
The case for savings
Life expectancy far exceeds the working age in nearly every nation today. The simple fact is that we will need money for a lot longer than our productive lives. Unless there is good reason to expect someone else to provide for your old age, you will need to have your own savings. One need not save huge amounts however, just regular. Over time with a good strategy small savings can add up to quite a bit. If you need more convincing about the importance of saving, simply consider the alternative. Being too old to care for yourself, having no income and no savings to fall back upon is a scary prospect indeed.
Having established that setting aside for savings comes first, now let us take stock of how much disposable money we may have left and how to make a good life of it.
How to save
We all have mandatory expenses. Even a highly paid expat in a developed economy such as Scotland may need to send money from UK to family back home regularly. Savings need to come from the money remaining after attending to your obligations. Saving money also does not have to mean cutting back on your lifestyle severely. Saving is about eliminating waste and optimizing the cash flow. There are hundreds of simple ways to do that. You can migrate your savings to a bank account with a slightly higher interest rate and your credit card debts to a slightly lower rate. Refinance your loan/mortgage. Compound interest is a powerful force and a rate difference of just 0.25% can compound to sizable magnitudes over time. For the same reason it would behoove you well to pay off your debts at the earliest and avoid any new debts like the plague.
You can choose to live in a smaller or shared apartment. If you are a landlord consider listing your property online and renting it out on daily instead of monthly rates. Dissect your internet/phone/utilities expenses and see if you can get different plans which better match your usage. Do your research and explore all options. There can be wide variations across providers. The same goes for insurance and other recurring costs.
Make a shopping list for groceries (and everything else) and a make it a habit to stick to it. In addition to saving money you will never run out of something unexpectedly. You can get apps to alert you about discount deals and coupons. Buy clothes at thrift stores and furniture at yard sales. Pack your own lunch to work.
Spend less and have a great time
Every person may supply a different answer to what ‘having a life’ means. People tend to gradually mature out of activities that defined ‘fun’ in college, although at the end of the day nobody else can prescribe what makes life meaningful to you. Some types of ‘fun’ cost more than others. The list of activities you can enjoy at low or no cost is endless. A jog in the park, yoga or bike ride can help you start your day right. A picnic with home cooked goodies, potluck, board games, a match of soccer or ultimate frisbee are all fun activities that let you be social and frugal at the same time. Instead of a night out on the town consider inviting friends over for dinner with BYOB. There are apps to help you find your interests in your city. Events such as fairs, fests and performances are often free to attend. You can get an annual membership to a decent library for a fee that would seem microscopic in comparison to what you might pay for cable in a year.
One of the most rewarding things you can do is to invest some time into yourself. Learning skills and trying new hobbies can be great fun. Learning to cook is a good bet. It is deeply satisfying to know that you can get your favorite food anywhere you live. Learning is a new language is a sure way to connect with a completely different set of people and to keep your mind young. You can take online courses or simply watch videos to learn a host of things such as tai chi, baking and origami.
When you start to list the staggering amount of free things you have never tried, having a good life at a reasonable cost will seem not only easy, but obvious.