Yesterday, Today and Tomorrow

Every dollar that passes through our fingers has a destiny.  It is used to fund our lifestyle either yesterday, today or tomorrow.  Think about it.  We are either paying for the purchases of yesterday through payments, enjoying the comforts of today or preparing for our tomorrows by saving. 

YESTERDAY:
The purchases of yesterday might be something of lasting value like transportation that gets us back and forth to work so that we can continue earning dollars in the future or it might be those impulse purchases that some slick salesman made us believe we couldn't live without one more moment.  Yesterday purchases include the meal that we charged so we could go out with our friends or the gas we purchased when we were short on dough. 

Sales people know that we are short sighted generally, so when it comes to larger purchases, rather than talking about the price, they will often discuss the monthly payment.  Whether it is furniture, appliances, computers or cars, sales people know they can get their commission today if we will commit to piling on a bit of debt.

Those purchases of yesterday add up quickly if we are not careful.  In Bank On we discuss the magic of compounding, but our credit card companies have learned that lesson too and they can use that compounding against us unless we have a plan to minimize our reliance on debt.  If you are finding that the yesterday is stealing from your today and tomorrow, you might want to build a debt snowball by visiting www.powerpay.org.  At powerpay.org, you can create a secure login, list your debts and find out how a debt snowball can dramatically reduce your repayment time saving you both time and interest.

TODAY:
Our lifestyle has a cost.  The things we buy today can keep us from moving ahead on our financial goals.  We live in a culture where we are encouraged to get what we want now and let the future take care of itself.  The pair of shoes that catches our eye, the night out on the town, the camp for our kids all can wear away our cash. 

Sometimes, little things can be a spending leak that diverts our funds from the important to the trivial.  For instance, how often do you make an extra purchase at the gas station or buy more than what was on your list at the store?  Even vending machines at work add up over time. 

To get control of your spending leaks take the challenge of tracking your expenses for a month.  If you are diligent about tracking every single dime, you will be amazed at the potential leaks that will be uncovered in process.  You can find a Spending Tracker under our Worksheets section of this blog. 

Finally, one of the "today" expenses that may need some careful management are the fees we pay.  Every late payment, every overdraft transfer, and even some services come with fees.  We all pay fees of some sort, but the trick is to manage well so you don't pay for services you don't need.  Check out the worksheet for When Are Bills Due under the Worksheets section of this blog. 

TOMORROW:
The savings we earmark from each paycheck buys us opportunity and perhaps even time tomorrow.  Think about it; when you have an emergency savings established, you have options when it comes to funding those unexpected and unplanned expenses.  Savings also allows us to purchase larger items without having to finance them.  We can buy at a discount and never pay interest.

If I lose a job and have emergency savings, I have bought myself some security and perhaps even extra time so that I can find the next job that meets my career goals rather than needing to take the first thing that comes along.  Savings buys us time to recover from the unexpected without having to incur unnecessary fees.  We have time to regroup and plan for replenishing our safety net without having to go into crisis mode.  Nearly every financial crisis we face can be lessened or avoided altogether with that savings safety net in place.

We also need to have savings for those periodic expenses that come along like personal property taxes, back to school, birthdays, holidays, car maintenance and the like.  Savings keeps the periodic from becoming a budget buster.

After our basic savings is in place, having an investment plan to prepare for the long term like retirement is essential.  Few of us can work until the time we pass and most of us don't want to.  Preparing for retirement and later life expenses allows us to have greater opportunity to enjoy life in the future.  Savings and investing is like having an added layer of insurance to protect us in the future. Savings is flexible too.  Unlike insurance that only covers specific hazards, savings can be used to cover any hazard that comes our way. 

They say Cash is King.  With savings in place we can allow our money to begin working for us rather than stealing interest and opportunity from us along the way.  To get started on your savings plan, check out the resources at www.americasaves.org or get your Ballpark Estimate for retirement at www.choosetosave.org/ballpark.



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