One day I woke up with an atrocious hangover, and it hurt so badly that I told myself, ‘It’s time to stop. I can’t do it anymore. It’s not good. It hurts too much.’
Okay, bizarre title, but bear with me:
planners often feel as if they preach sermons to encourage needed
And like most “you should be doing
this!” sermons, their preaching is met with serious resistance.
So here’s a different approach:
In college, you must have had at least one morning where you
woke up with cobwebs in your head, regretting all the partying you did the
night before. Not only did you feel
sick, you couldn’t believe how you acted or worse, had no recollection. And to make all this worse, your bank account
is overdrawn and you maxed out your credit card.
It’s not that you didn’t know better. Of course you did. But you told yourself, “hey, I’m young, now’s
my time to live!”
Okay, now imagine that we are
talking about you waking up at age 60, after several decades of living it up,
with more than cobwebs in your head and an empty wallet: you don’t have enough to retire. In fact, you have to work much longer than
you ever hoped.
You spent decades eating out, entertaining,
going on costly vacations, buying expensive clothes and such instead of saving
what you needed. Unlike partying in your
20s, where you can catch up on by being frugal later, at age 60 you can’t catch
up and you don’t get to go back a few decades to make up what you needed.
Just as you know better than
to party all the time, you know that you should be planning for retirement,
even if it is many decades away. At the
same time, you don’t need to sacrifice everything today for the future.
What you do need to do is find
a balance in your spending and saving.
And that is where planning comes in.
Here’s one example: managing
your cash flow:
Preparing a budget requires
some serious work and isn’t that fun.
You need to review 12 months or more of spending, analyze it and then use
it to project and inform future spending. You will see where every dollar came in and
went out. That can enable you to shift
where some dollars go, so you save more for future goals.
Preparing a budget is
unpleasant and having the discipline to follow it is challenging. But, like following a diet to lose weight,
your financial health will improve. If your
doctor says your health depends on a diet, you follow it.