The Danger in Living Just for Today
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Hi everyone! I’m thrilled to be joining the Frugal Rules team. John’s blog was one of the first I ever read, and it was a nice introduction to the personal finance community. I hope you find my contributions as helpful as the rest of the content on the site!
I recently took a trip back home to visit my friends and family, as I moved away close to a year ago now. Most of my friends are in the teaching field and have graduated college, or are currently in grad school.
During the week I spent with them, I picked up on their mention of money quite often. A group of them were planning on traveling overseas during spring break, and I found myself a little envious.
That didn’t last long when I realized most of them were pouring their entire savings toward this trip. As a result, money would be tight for the rest of the year. Being teachers, they want to take advantage of having the summer off, but with money being an issue, they can’t.
It got me thinking about the danger in living for today, or at least, specifically for one goal at a time.
Of course, I’m glad my friends were actually saving up for this trip, rather than putting it on a credit card, but what they were failing to consider were long term goals. With their bank accounts drained and complaints of being broke…what was next for them?
The Danger in Living for Today
Let’s back up a second. I love my friends, and I’m not trying to throw them under the bus, but throughout my trip, I couldn’t help but notice how much they spent on various forms of entertainment.
They go out to eat often, they go to bars for drinks at night, some of them have long commutes and refuse to move closer to their jobs, they think nothing of buying anything related to their hobbies, and they plan parties that are a bit on the expensive side.
All the while, many of them have student loan debt, and most are still living at home.
Sure, you could argue they’re enjoying the present and making the most of it, and you’d be right. Admittedly, I enjoyed my time spent with them, even when we were spending on things I otherwise wouldn’t.
The difference is, I planned for this trip – I knew I’d have an unusually high month of spending. I never lose sight of the fact that I have student loan debt hanging over me, and I always weigh my purchases against that fact.
Simply put, spending money takes me further away from my goal of being debt free, and I make sure that when I do spend, it’s worth it.
When you’re only living for today, you’re ignoring all of that! None of my friends are saving for retirement, and in fact, one of them figures he’ll be in debt for the rest of his life, so why should saving matter?
You Can’t Predict the Future, but You Can’t Ignore It, Either
I get that retirement is a long ways off for us. We’re in our 20s, and most of my friends aren’t interested in early retirement. They’re passionate about teaching, regardless of the salary they’re being paid.
While I think that’s great, that doesn’t mean throwing caution to the wind with their money is in order.
I was taken aback that my friends had fallen into the trap of thinking debt is normal. It’s not – we don’t have to live the rest of our lives in debt if we don’t want to. It’s a choice that we can actively make.
Sadly, some people are oddly set on it. Living paycheck-to-paycheck is normal for them, and they’re willing to deal with the stress it causes if it means instant gratification now.
The reason I share this story with you all is because this mentality isn’t going to lead you to financial success. We have to consider our future needs and prioritize saving for them alongside our short term goals.
It’s dangerous to throw retirement aside because we can’t imagine living it for another 30 years. It still matters, and compound interest makes it worth our while to invest as soon as we can.
What You Should Be Living For
If we shouldn’t be living solely for today, what should we be living for? It’s always a balancing act, isn’t it?
Well, I think living in the moment can be done responsibly when you budget for it, and I also think you can accomplish it while keeping the future in mind.
If you’re enrolled in an employer-sponsored retirement plan, such as a 401(k), then set up automatic contributions right off the bat. You won’t see the money, which means you won’t become reliant on it. You’ll be saving and still living within your means.
Similarly, if you set up automatic transfers from your checking account to your savings account, you can save for any short or long term goals you have. Yes, goals – multiple, not singular!
Again, saving up for a short term goal is great, but you should always aim to have an emergency fund or some sort of buffer in your bank account. It’s not a good idea to leave yourself with nothing in there.
I’ll give you my situation as an example of putting this into action:
- I’m currently paying back my student loans, ahead of schedule.
- I opened a Roth IRA with Vanguard and contributed the minimum amount to get started.
- I spend on my values, which I prioritized at the beginning of the year. I keep spending to an absolute minimum on everything else.
What are the values I prioritized? Travel was one of them, and a few inexpensive hobbies were another. I don’t stress about spending as I saved for all of this beforehand (by prioritizing saving!).
Choosing to be intentional with my money, while keeping my future needs in mind has made this possible. I’m willing to bet most of my friends aren’t being intentional with their money, otherwise they wouldn’t be living paycheck-to-paycheck.
By cutting out any excess that I don’t enjoy (such as dining out and shopping for clothes), I make room for what’s important, and I’m happy with how things are. I’d like to pay more toward my debt and invest more, but there’s only so much I can do before I’m stretched too thin. You need to find a balance you can live with.
Do you think it’s dangerous to live just for today, or do you think it’s important to find a balance between present and future needs? How have you found your balance? What are you willing to spend your money on?