FREEDOM. The images that come to my mind with this powerful word include bald eagles, soaring high above. Or lounging on a sunny and quiet beach in Mexico. Or my first car: a dark blue 1984 Mazda 626 with shiny, cheap hubcaps and nearly 200,000 miles on it.
(What?)
Yes, my first car. This, for me and many a teenager, was the first symbol of independence and freedom. To have a car, especially as a 16-year-old, is a milestone in growing up and being allowed the freedom to go where I wanted and make choices for myself. I took my first job at 14 in an effort to start saving to buy that car. My mother offered to match any amount I saved for a car – my first example of a matching contribution! Thanks, Mom! That incentive worked and therefore so did I and hard…forfeiting spending on the Now Me so that the Later Me could get this car.
Fast forward a decade (or three) and my niece is now experiencing the other end of the spectrum of financial freedom. Her generation doesn’t seem as motivated by cars (again with the What?). For her, freedom comes in the way of freely spending her DQ earnings on fast food, with an emphasis on fast, meaning how quickly her money is gone when she does this. Lucky for her, she is coerced to save half of her paychecks, thereby allowing her to exercise this freedom she desires with the other half. See, without the carrot (future car), she doesn’t see the point in investing in the Later Her…she only wants to tend to the Now Her.
Emotionally for us, financial freedom runs along a spectrum like this:
NOW…………………………………………………………………………………………..LATER
We all fall somewhere along the spectrum and we move along it depending on all kinds of factors. Those who spend their paychecks as quickly as they make them and live large without concern for saving for the future are at the NOW end of the spectrum. Those who are avidly saving for retirement are generally at the LATER side of the spectrum, sacrificing current spending in order to have more freedom later.
Investment professionals and CPAs (ahem!) will likely argue that the LATER side is better. I won’t lie, I’ve professed this for years. But let’s be honest here – we want to live comfortable lives in the meantime. We aren’t all willing to live in a tiny-home or forgo having a car in order to “mind the gap” – reducing spending in order to have more to save in the end.
Questions:
Which side of the spectrum is better?
Do we need to be at one end or the other?
Answers: BOTH and NOPE!
You can tend to both the NOW AND LATER (wait, weren’t these candies in the ’80s? I seem to remember blowing $10 of allowance each week on candy like this, clearly operating on the NOW end of the spectrum).
Hear what I am saying: we don’t need frugality (although it helps) or reckless spending sprees (although a little freedom in spending helps too). What we do need:
BALANCE
Question: How do we strike this balance of the NOW and LATER?
Answer: Find your balance at buckthebudget.com.