By Debbie Hancock
We’ve all felt the tug of instant gratification – the desire for a spontaneous purchase or a luxurious experience. While it’s important to enjoy life’s pleasures, striking a balance between immediate enjoyment and long-term financial goals is essential for a secure future.
This balance is particularly challenging in today’s consumer-driven society. The “YOLO” mentality encourages us to live in the moment, but it’s important to consider the potential consequences of impulsive spending.
My grandparents often remind me to live life to the fullest as we don’t know what will happen, but it’s important to balance the excitement of today with the practicalities of wanting to have an enjoyable future and a comfortable retirement with choices.
A Personal Perspective
Early in my career, I focused on immediate needs, opting out of long-term savings like pensions and share schemes. As my income increased, I promptly enrolled into both schemes and it paid off. When the value of the company shares grew significantly, it allowed me to cover unexpected expenses like a boiler replacement during the cold winter of 2020.
The Desire of Living for Today
Our brains are wired to seek rewards and instant gratification can be incredibly satisfying. However, it’s important to balance these desires with long-term financial goals.
There’s something undeniably appealing about living in the moment. Whether it’s treating yourself to a spa day, treating your family to dinner, jetting off on a long weekend or simply enjoying a quiet evening at home. These little pleasures make life worth living.
I’d always wanted to treat my mum to afternoon tea somewhere special, but it felt expensive and indulgent. In 2016, when it was her 50th birthday I decided to stop waiting because we don’t know what the future holds. I took her for afternoon tea at a hotel in central London and the hotel presented her with a mini happy birthday cake that we weren’t expecting to receive. It’s an experience that we will always remember and still talk about fondly today.
Experiencing life’s joys is essential but we cannot forget about the future. A secure retirement, being able to support the children, a comfortable home and having a choice about when to stop working are all worthy goals. The key is to find balance.
The Importance of Financial Security
While living for today has its merits, it’s equally important to secure your financial future. Financial security provides a sense of peace of mind, allows you to sleep peacefully at night and have confidence in your financial future.
By saving and investing wisely you can:
- Reduce financial stress: Knowing that you have a safety net can alleviate worries about unexpected expenses or job loss.
- Achieve financial independence: Financial security allows you to make choices without relying on others.
- Build a legacy: By planning for the future, you can leave a lasting impact on loved ones.
Balancing Act: The Art of Compromise
It’s not about depriving yourself of life’s little luxuries. Instead, it’s about making conscious choices. Consider setting a budget that allows for both savings and spending. Automate your savings so you don’t even miss the money. And remember, every little bit counts. Even small, consistent savings can grow into a substantial sum over time.
Give your priorities a value, how much is the house you want to buy, the holiday you want to experience, or what sort of retirement do you want? This doesn’t mean that you have to cut costs all the time; rather be realistic about how your income matches up against your short and longer-term goals.
Here are some practical tips to help you strike the right balance:
Set clear financial goals: Define what you want to achieve, whether it’s buying a home, starting a business or retiring early.
Money date: Either with yourself or with your partner, it is important to set time aside to discuss finances, what you want to do now and what you want to achieve in the future.
Create a budget: A budget helps you track your income and expenses, ensuring that you’re allocating your money wisely. What proportion of your income goes to expenses like rent or mortgage, insurance, emergency fund, utilities and so on? How much goes into eating out, food, entertainment and days out?
Create a fun budget: Open a separate account for your fun money so that you can see when you can treat yourself and how much you can spend. Once that account is at zero, you stop spending. By doing it this way, you are consciously balancing the present and the future. No budget will work in the long term if you deprive yourself of fun, and in fact, could even lead to overspending later.
Review costs: don’t be afraid to negotiate with suppliers and compare costs – insurance, energy, food, subscriptions etc.
Review subscriptions: Are you really using all those streaming services, memberships or online subscriptions? Consider cancelling or downgrading any that you don’t use regularly.
Automate your savings: Set up automatic transfers to your savings account to make saving effortless. Have separate spaces, or accounts, for bills, food, fun, car, Christmas etc.
Take stock of what’s important to you: How do you want to live your life now and in the future? Put financial numbers to the things you want to do.
Avoid impulse purchases: Take a moment to consider whether a purchase is truly necessary. You could even add “friction” to the transaction, such as taking one-click pay off your phone or removing your card details from your phone. Maybe agree that you will leave an item in your “basket” for 48 hours before purchasing.
Invest wisely: Explore investment options that align with your risk levels and financial goals.
Seek professional advice: Consult with a financial advisor to get personalised guidance.
Small Steps, Big Rewards
Remember, financial freedom is a journey, not a destination. It’s about creating empowerment and choice. By taking small, consistent steps you can achieve your financial goals. By making conscious choices, setting realistic goals and taking consistent action, you can create a brighter future for yourself.
About the author
Debbie Hancock is a Financial Management Consultant and Money Mindset Coach at Southbourne Accountancy. She works with individuals and organisations to improve their financial future and their relationship with money.
Hosted by the Women Pivoting to Digital Taskforce in collaboration with Lloyds Banking Group, this event is for women based in Leeds who are considering a move into tech or digital roles and are interested in learning more about how to transition.
