How do you balance saving for tomorrow with enjoying today?
This is a tough question, right?
We all want to set ourselves up to reclaim time, have a great retirement and enjoy the later years of our life without struggle.
At the same time, your kids are only going to be young once and who knows if you’ll even be alive or in good health to do all the things you’re putting off until retirement.
So what can you do to ensure that you have balance? How can you prioritize the future and enjoy today?
My wife and I began our debt free journey with $61,000 worth of debt in 2014. We became completely debt free 16 months later. $61,000 in 16 months. In other words, we blazed through it.
That hustle has really paid off. For perspective, I’m not earning my income due to being furloughed during the Coronavirus pandemic. We’re operating off of one income, and we’re getting along just fine financially
Since becoming debt free, we’ve been able to save ridiculous amounts of money– around sixty to seventy percent of our overall income. And not to brag or anything, but we’ve been crushing this ‘money thing’ for close to six years.
On top of our financial goals, we’ve afforded incredible life experiences too.
I’ve sat courtside at NBA games, we take three to four vacations every year and we even paid to bring my niece along when we took our daughter to Disney last summer. We do those things because life is so much more than just having a high savings rate.
How have we been able to live an awesome life today, while still preparing for the future?
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Set long term goals
When I say we set long term goals, I don’t mean we just wish that we can retire someday.
No, we actually sat down and said, “Okay, what do we want life to look like at age 30? What do we want life to look like when we’re 40 and 50?”
What we realized is that around age 40, our children would be close to high school age, and it was important for us to not have to miss important events– to be there for major milestone moments.
We didn’t want to miss out on things like that because of work or other responsibilities that could potentially get in the way.
Early in our marriage, we decided to have enough money saved and invested to be work optional by my 40th birthday, which is August 13 2029.
From that goal, we started working backwards.
We said, “Okay, so how much will we need to live this type of lifestyle based on our projected expenses at the time? When will our mortgage need to be paid off? When will our cars need to be paid off? Based on what we project our expenses to be, how much will we need to live off of this for as long as we need to.”
From that point, it became, “How much do we need to save and invest every month or every year to actually make this dream life a reality?”
And from there we got to work.
Create the savings plan that’s required to reach those goals
Once we had the number, we took ourselves completely out of the equation by automating our savings.
Now, it’s not a question of, if we’re going to save half our income this month. The halfway amount is where we start from because that money is getting transferred from our bank account to our brokerage account, to buy index funds, whether we like it or not.
It’s automatic. It’s happening. We’ve automated everything that goes towards our future.
Then there’s today. We have a two year old and she’s hitting these incredible milestones. It seems like every day just goes by faster and faster. She’ll be 19 and on the way to college before I know it.
To kind of illustrate this, I’m going to share a story.
Towards the end of our debt free journey, I began working for a company and things were going great. I loved my teammates. My manager was incredible. The company seemed committed to growing, which is something that’s important when you’re in sales.
A few months into the position, leadership decided to go in a completely different direction. My manager and a few other leaders that I loved were let go and my role was changed.
The manager they brought in was absolutely terrible. It got to the point where I hated working there every single day. And it wasn’t just at work. I would bring that negative energy home. I was complaining about everything. I had a short temper, and my whole being changed because I was spending 8 hours a day doing something I dreaded.
I stayed because I knew we had these big goals. Although I hated what I did, I kept showing up and performing because I wanted my commission checks. Yes, I hated going there, but this goal is bigger than me. This is my family. This is my wife. This is my daughter. This is our legacy.
So I keep going in every day. I’m still hitting my sales goals, I’m still hitting all my numbers. Even though I was absolutely miserable.
One day we’re having dinner and Taylor looks at me and asks, “Listen, if you hate it so much, then why don’t you just quit?”
I hadn’t really thought about the fact that we could feasibly live off of Taylor’s income at that point. I hadn’t considered the fact that we had built an emergency fund that would get us through a job search, should we actually need to touch the emergency fund.
I went into the office, I gave my notice and I was gone shortly after that.
The truth is tomorrow isn’t promised to any of us.
So while we have huge goals for our future, it’s important that we also make sure that we’re enjoying life together as a family. Now that I have left that toxic work environment, we’re enjoying the journey towards our goals now.
From that instance, we learned how to prioritize what was important for us in the now. That included things like quality family time, not a grumpy dinner where I’m coming in upset about my workday.
That includes serving other people. Actually having the time and the mental capacity to go help make other people’s lives better.
Find out what you actually value
The journey to financial freedom shouldn’t be a miserable one. Just because you’re working towards a future goal doesn’t mean that you have to delay basic happiness until you hit that goal.
Awareness is the key here.
My dream car is a Corvette. And it would be so nice to just go buy one this weekend, but doing that could have me potentially stuck at a job I hate just to be able to make the payments every month.
That would actually slow down the progress to our big goal and with that being the case, I wouldn’t be thrilled about the shiny new Corvette. Essentially what this means is I don’t value that car more than I value financial freedom.
A 3000 square foot house in a gated community would have been fantastic. I would have loved a massive game room and a backyard pool, but we can and we have made incredible memories as a family in our less than 2000 square foot house while still staying on track towards that goal of being work optional at 40.
Making those two choices to not buy the Corvette or own a mini-mansion has freed up so much of our income that we now get to spend money and time traveling together.
We get to catch live sporting events and concerts together. We get to live a life we love and actually value, not things that society says that we need in order to look successful.
It’s because I’m aware of what it is that I actually value and know what will bring me joy. I never feel like I’m choosing between living today and saving for tomorrow. I’m always spending money on things that I value, whether that’s an investment, or it’s a getaway with my wife that helps us connect deeper and relax together.
I’m literally always using money to enhance my life according to my values. Whether that’s investing for early retirement, or something simple like always getting the dessert if it intrigues me.
This year, we intentionally carved out more money for date nights. We set money aside for one on one dates out with our daughter to ensure that Taylor and I both have our own unique relationships with her.
We were willing to spend a ridiculous amount of money to go on this big seven day trip with the rest of my family. And again, it’s because we value those things.
Because we value those things, we never feel guilty for buying them. We never feel like our higher than normal savings rate is keeping us from enjoying life.
In fact, it’s really just the opposite. So, setting goals and saving for the future is what opened our eyes to our values, which helped us to clearly see what we needed to do to have fun with our money today.
Now, could we save more and reach our goal faster? Absolutely. But what things that we value would we have to give up to make that happen? Would it be worth it?
That’s the question that we have to ask ourselves.
Before you buy something, stop and ask yourself, “What value am I really getting from this?”
Sometimes the answer is a ton of value and you go ahead and make the purchase. Other times the purchase doesn’t bring enough value and you put it back on the shelf.
But again, that starts after you draw that line in the sand and you declare just how much you need to be putting towards your goals and automate that process.
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