Bad Credit Loans realizes that budgeting can be tough & often involves trade-offs. We take a look at some of these trade-offs in a series of articles. Here’s our first look at what you may need to trade if you want to save a bit of money for the future…
For this budgeting trade-off posting – I want to address the issue of whether it is best to live in the moment by choosing to spend and enjoy your money OR is it better to try and save all of your money for the future?? Paying off debt and creating a savings pot involves a bit of give and take. I suppose one side of this argument may speak to individuals at different times in their lives, however regardless of a person’s age – this predicament does tend to relate to a wide range of Canadians each year.
Plan A: Living in the Moment
Perhaps more typical of an attitude felt by many young adults with regards to their money – phrases may include “ you are only young once” and “I want to travel and enjoy life while I can” are commonly heard all over the world. I’ll admit that the allure of this youthful perspective is almost enough to make me side with this first plan immediately, with no questions asked – but then I remember my actual age, and I decide that I should continue to examine each scenario in more detail before I jump on the bandwagon completely.
First of all, how people decide to spend their money will vary from person to person, whether it is to invest in a home or pay monthly rent towards an apartment that they never wish to own. Other possible avenues for spending money may involve going on expensive vacations, buying luxury vehicles and collecting valuable household possessions. This does not necessarily mean that some money has not been set aside for the future, however the ‘present’ remains more of a focus versus long term financial goals. While it is nice to live in the moment there can be some cons that do crop up within this way of life.
The potential downside of continuing to spend this way is that this could get out of control at some point – leading to financial difficulty. Sometimes, with these types of lifestyles – bad spending habits can develop and the immediate gratification one gets from constantly buying whatever they want can make it so a person is never satisfied with the things they have and they always want more.
Secondly, if not enough money is set aside for emergency type situations – job loss, a health crisis, etc – this is where this type of spending lifestyle could catch up to us. Of course, this is not to say that these patterns will occur for everyone, but it is a red flag against this course of action.
Plan B: Saving for the Future
Saving for the future, not only helps us meet our long term financial goals – but it can also give us the peace of mind we need, while decreasing our worries of not being financially prepared for unforeseen expenses that could blind-side us at any moment.
Allocating money towards various savings accounts, such as educational goals, home ownership or retirement plans is an action that many choose over spending their all of their money. Let’s face it, living paycheque to paycheque can be very stressful. Instead of focusing on gaining enjoyment from constantly acquiring new items, instead, you can choose to get enjoyment from preparing to become a home owner and investing in your home or in a future goal.
The downside of always saving your money, however, can also mean that you might not be living in the present at all. If you are always thinking to the future, you might be distracted from certain opportunities and miss out on meaningful moments with your family and friends. In this scenario, to ensure, you don’t start down the path to overspending, you can be selective with regards to areas where you will save or cut back on that month or even a few months in row. This way you can enjoy your money, as wall as continue to set some aside for future milestones.
Plan C: Finding the Balance
While, you might disagree with me on this point, I actually think living in the moment and saving can actually occur simultaneously. Spending and Saving can happily co-exist if there is a balance found between both. This is where it is always comes back to good old budgeting.
In my opinion, maybe there does not even need to be a trade-off of any kind here – but rather the best of both worlds can be had – we can enjoy our lives and we can also make sure to be prepared for the future.
What do you think? Can this be done?
