Planning for – and Enjoying! – Today and Tomorrow


I’ve had some interesting conversations about money with friends recently that centered around two ideas:

  1. It’s difficult to know what I want my life to look like in the future so I struggle to know how to save and manage my money today.
  2. I struggle to balance spending in ways that add value to my life today while also setting up my future self for happiness and success.

As I’ve thought about these conversations, I’ve come up with a few things I think you can focus on today without needing to know all the details of tomorrow. By focusing on these things, I think your present self and future self will both be able to live your great life, even as your circumstances and preferences changes.

Do These 5 Things:

  1. Get a handle on your debt.
    • Do you have any? How much? What is your plan to pay it off?
    • You should know how much you have and have a strategy for paying it off with a specific date in mind.
  2. Build an emergency fund.
    • Keep enough cash on hand (preferably in a high-interest savings account) to provide the peace of mind you need.
    • 3-12 months of living expenses is a common guideline.
    • Ultimately, you need to have enough cash in the bank so you don’t stress about unexpected expenses.
  3. Set a savings rate and then automate savings and investing.
    • Whether you decide to save 10% of your income or 50%, you need to decide on a number that is right for you and then automate it so you don’t have to think about it.
    • This number should be comfortable for your present self (so you can enjoy life today), while also building a nest egg for your future self.
    • While you don’t know what your future lifestyle will look like, pick a number today that you can look back on and feel good about.
    • I then recommend investing your long-term savings in low-cost, globally diversified funds.
    • As your income and life circumstances change so too should your savings rate and investment risk (think less risk as you get closer to retirement).
    • Once you set your savings rate, you’ll then want to automate saving and investing so you don’t see this money or have to re-decide every month whether you’re going to save it. (A 401(k) plan is one good way to do this.)
  4. Buy the guacamole.
    • With the big stuff in place (paying off debt, building an emergency fund, and saving and investing for the long-term), you can evaluate what you’ll do with your remaining monthly cash flow.
    • If the big things are in place and you’re at a point in your life where cash flow is comfortable, you can stop worrying about small purchases such as buying a morning coffee, adding guacamole to your burrito order, or paying for the convenience of a Lyft.
    • Ask yourself what small things make you happy and even add value to your life (such as buying books for continued learning) and start buying them.
    • For those of you who can be very frugal (myself included), this is a good way to practice spending money on yourself and the small things you enjoy with very little impact on your financial life.
  5. Turn up spending on the big things you love.
    • Again, if the big things are in place and you are at a point in your life where cash flow is comfortable (meaning you know what you can afford), it’s time to determine what you most love to spend money on and turn it up.
    • The key is to identify what you love to spend money on and spend more in that area and less in other areas.
      • For example, if you love to travel because you love exploring new places, you might turn up your travel spending and cut spending on eating out (both at home and while traveling). You can save money on food throughout the year and even on your trip to allow you to spend more on flights to and experiences in new places.
      • On the other hand, you might love spending money on fancy restaurants and focus on trying all of the nicest restaurants you can drive to, rather than spending money on travel.

Live a Meaningful Life, Now and in the Future

While this is a short list (and not a comprehensive, customized financial plan), I hope it paints the picture of what to focus on today. While we can’t predict the future, we can be smart about how we spend and save today to allow our present selves and our future selves to live fulfilling and meaningful lives!

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