Relax. Live for the moment. And enjoy life.
If you’re like me and always have a long to-do list to get through each day, then you may find this advice difficult to follow. After all, how on earth am I to focus on the present and live in a world that requires me to constantly look ahead and plan for my future?
I know many people who, despite being in a financially privileged position, struggle to spend their money on things that make them happy. Friday night dinners with friends, weekend trips abroad (pre-pandemic) and the occasional indulgence in something materialistic, they’re all a rarity. Instead, their spending habits are controlled by a fear of being derailed from their goals, where even a few weekend drinks with friends is deemed an overindulgence.
And conversely, there are those who struggle to look past the next weekend. These are the true social bees, who love nothing more than making the most out of the present but struggle to make the necessary sacrifices for a better future.
I can see reasons for adopting either perspective, but choosing to lean too heavily to either side may come at a cost. Adhere to your goals with monk-like discipline and you run the risk of depriving yourself of life’s pleasures. Stray too far away from them and you’ll find yourself with an unfulfilling pension.
It’s all about balance
And realising when we’ve spent too much time focusing on the present rather than the future and vice versa.
We also have to realise that the world we’re living in has changed. Retirement isn’t the same as before. Now, many of us are going to live longer, with a higher percentage than ever before expected to reach 100.
That’s 35 years of retirement. To be able to live freely during our golden years, where we can travel, explore and pursue personal interests, we must build the blocks for a strong pension. This is a daily commitment that requires instilling a mindset that keeps one eye on the future and another on our expenses.
And so it’s important for us to find that happy equilibrium where we can spend our money on life’s pleasures without the guilt while working diligently towards our goals.
This is where you need a financial planner
Using a financial planner will help to get the balance right. At the beginning of each month, I have a direct debit transaction that moves a portion of my savings into a pension fund for my 60s. This amount is based on a strict set of calculations that encompasses a whole range of variables, including my goals, incomes, hobbies, pleasures, social life and much more.
As long as I remain disciplined enough not to tamper with my pension investments, I’m less likely to feel the guilt that comes from embarking on something completely spontaneous.
That’s the beauty of having a bespoke financial plan - it gives me the freedom to pivot between pleasure and work, where I’m able to withstand the guilt that comes from not ticking everything off from my to-do list.
Admittedly, there’s less room for spontaneity during the pandemic, when I can no longer meet friends in my favourite pub on a whim. Now I have to make do with impulsive purchases on Amazon.
Even so, I can make these purchases and enjoy the pleasures that come from them without the feeling of being side-tracked from my long-term goals. Live for the now and focus on the future.
And this is my objective for every client - create a plan that identifies a clear financial boundary within which they can happily spend on socialising, events and whatever makes them happy without losing focus on their long-term objectives.
Everything is targeted on getting the best of both worlds, where my client can use their finances to make the most of life.
As you would expect, unpredictable life events such as divorce and the pandemic can completely throw us off guard at times, making it challenging to know how to best use our money to find the centre ground. I will have prepared for that by deliberately making the plan responsive to change.
The plan is a living thing
I almost see each plan as a living thing, where it will adapt to your new situation. It is the asset that will help you find the balance required to live for the now and focus on the future. Without having some sort of structure to order our finances, we will never be able to find that happy equilibrium between pleasure and work.
But with it, you will know where the boundaries are, enabling you to tilt to either side when it suits you best. And that’s the balance required to get the most out of life.