Have you seen the Kiwisaver advertisement where a younger man comes across his older self in a supermarket carpark and is shocked at how little his older self can afford for food? It’s the classic battle between your current and future self. We all want to live a happy rich life in the future but the problem is there is so much temptation for us to spend now. I hear a lot of, “What if I get hit by a bus tomorrow? I want to enjoy today.” I get it on one level, but actually on the law of averages that bus isn’t coming for you any time soon!
To begin, you absolutely need a strong vision for your future. If money was no object, what would you do? Write it down, put pictures around it. Stick it on the fridge or in your bedside table. I keep thinking about what we would do with all that money if we didn’t have to pay the mortgage every month. It feels so liberating. The choices are endless. When it comes down to it, that’s what we all want, to live on our terms. Looking after your future self is one way to maximise the choices you will have.
Here are some tips to help you fight for your future self:
Credit cards. Don’t use them. They are a less transparent form of payment which makes it easier to spend and you never quite know where you are at. Banks incentivise us to spend more as well by offering free points or other incentives. Think if I didn’t want to purchase the thing in the first place, I’m no better off if I get free points!
Use cash. You know where you are, how much you have left, and it places a natural limit on how much you have to spend.
Shop to a list and plan your meals. You’ll spend less and it will save you the mental fatigue of figuring out every day what to cook for dinner.
How are your bank accounts structured? Do you have eftpos access to all your accounts, all the time? If you do, you’re in the majority. If you have access to all of your money you’re more likely to spend it all! Limit the everyday access you have to your money.
Set a budget and stick to it. How much do you want to spend on groceries, work lunches and coffees etc? Plan it out. Being in control feels good.
Track your spending against your plan. How do you know how close your goals are if you don’t measure your progress?
Start talking about money. Talk to your partner, children, family, friends about your financial goals. You’re more likely to stick to a goal if you verbalise it. It’s a form of accountability.
We can all do better than what we are doing at the moment. We know that your previous behaviour around money is no indication of what you can achieve in the future. Our clients verbalise their goals and put a concrete plan in place to achieve them and they have us as personal financial trainers to be accountable to! It’s a great feeling knowing you are achieving and securing your future.