Never save money for the future

Saving or investing

Many people don’t like to save for the future because they think it’s painful. Saving means they have to do without. Conversely, spending today is fun and enjoyable. Buying a new gadget, a new pair of shoes, dinner at a fancy restaurant, some wine (well, I regard wine as more of an investment). These things give your brain a hit of dopamine and make you feel happy (for a short while).

Sidebar: Fun fact. Neuromarketing studies have concluded that participants that watched videos of other people shopping generated similar levels of dopamine and brain activity (compared to physically shopping). Maybe this is a cheap solution for shopaholics i.e. watch videos on YouTube of other people shopping… Is that a suggestion you could make to your spouse?… perhaps not.

Enjoy the journey – don’t make it painful

The challenge with getting people to save for the future or participate in financial planning is that they see saving and enjoying life is mutually exclusive i.e. you can only have one, not both. For most of us, this is false. It is very possible to take some action towards securing your financial future AND enjoy life today. In fact, I believe that this is not only important but imperative.

Money’s only something you need in case you don’t die tomorrow

The above sub-heading is a quote from my all-time favourite movie, Wall Street. This quote makes two assertions. Firstly, life is very short and we should not waste any opportunity to enjoy it. Secondly, if we do happen to still be alive tomorrow (and well into the future), then we had better financially prepare for it. I believe both assertions are equally important.

The answer is to find some balance. To develop a plan that allows you to enjoy life today whilst still making adequate plans for tomorrow.

Redefining retirement will probably help a bit

For most people, the work that they do provides two needs that are imperative for most people to feel happy and fulfilled (based on Maslow’s hierarchy of needs). The first need is growth – the need to challenge ourselves, learn new skills, meet new people and so on. The second need is a sense of purpose. Employment typically provided a strong sense of purpose – particularly if you are doing work that you love and are proud of. Therefore, when we retire, to remain mentally healthy we need to think about what activities we will undertake that will provide growth and a sense of purpose.

A modern trend is to not retire in full. People may want to have the flexibility to reduce working hours i.e. work a 3 to 4 day week for example, but cannot see themselves retiring in full. This is advantageous from a financial planning perspective because you won’t need to draw as much money from super from age 60 onwards. This approach might help you achieve more balance now.

It is worth having a think about what you want from a lifestyle perspective. Do you want to retire in totality – or would you prefer to keep working for as long as your health permits?

It’s for ‘future spending’

Perhaps the simple action of redefining the definition of savings might help you. A person once told me that they cleverly referred to their savings account as a “future spending” account. Therefore, they were not contributing to “savings” but more accurately allocating money for future spending. This small mind shift helped them feel good about saving money.

It’s not a torture test

Building wealth is not a torture test. It should be an enjoyable experience. You work hard and you do deserve to enjoy some of your income today (in the form of an improved lifestyle). It is often the small ticket items that you buy (or do for) yourself regularly that ultimately provide a lot of lifestyle enjoyment. If you love new shoes, buy a new pair every quarter – don’t deny yourself – as long as you are investing regularly too. Almost everything in life is about balance and moderation. Investing should be enjoyable, rewarding and fun – don’t make it otherwise.