Smart About Money: Saving for the Future


It’s probably fair to say that most of the troubles people have with money have nothing to do with unavoidable disasters.

In fact, many of the troubles people have with money could be avoided if they did the one thing that most of us just don’t like to do: Make today’s financial decisions with your future self in mind.

Some rare people can plan and save for distant future events like retirement. For the rest of us, it can be too far away to focus on. But developing good short-term habits when it comes to saving and spending now lets you do what you can today and trust those good habits will help in the very long-term too.

And this isn’t about saving a few coffee-shop dollars a day, although that can add up over time and your future self might wish you had spent that money differently.

It’s about looking for ways to save thousands or tens of thousands — personal reserves that will give your future self “very good problems” to deal with, like “How do I want to live my life now that I don’t have to work unless really I want to?”

A few examples: “Want to know the easiest way to become a millionaire when you’re older?” was a question posed recently by Money magazine. The answer? Fully funding your 401(k) plan and taking any employer match. Even if it means cutting back on a few meals out, a couple of weekend trips or more clothes. A 401(k) can grow with huge tax advantages for decades and provide your future self with an enviable nest egg from a handful of sacrifices that will seem painless in the big picture.

Speaking of relatively painless sacrifices, arranging to “pay your (future) self first” by having a regular amount swept into savings every pay period works because it’s so easy. Getting that money out of your hands before you can spend it lets you save real money without feeling deprived. Start where you can and increase the sweep amount as you’re earning more.

Homes and cars (with associated tax/insurance/upkeep expenses) and vacations can add up to big money very quickly. Consider opting for less house, late-model used cars, and different kinds of vacations.

One sign that you’re on the wrong track: You’re running up credit cards to pay for your lifestyle. Look for ways to spare your future self the struggle of paying back huge credit card bills plus interest for purchases that may be long-forgotten by then.

Sometimes people say they can’t afford to save because they have expenses — rent or a mortgage or credit card and car payments. In that case, you are the future self who is paying now for decisions your past self made. You’re living with what that’s like. And continuing the way you’ve been going probably means things are going to get worse, not better.

If that’s your situation, make a U-turn. Try small experiments. Start adding to your 401(k). Cut back a little on some expense that’s been making you uncomfortable. Build on that success. You get to choose, so choose to choose differently. Be courageous enough to go in a new direction, knowing that it will not feel like “fun” when you’re doing it. It never does.

The “conventional wisdom” will always make it seem like no matter what you do today, tomorrow will be filled with burdens anyway. But for many people — maybe most people — that simply isn’t true. Choices you make now can make things better. Stay away from extremes. It’s not “no fun” versus “no savings.” Make it “some fun” and “some savings.” You’re the only one who can do it. And your future self will be very grateful.

Nick Maffeo is the president & CEO of Canton Co-operative Bank in Canton. Have a question? Email to

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avatar Posted by on Jun 19 2015. Filed under Featured Content, Opinion, Smart About Money. Both comments and pings are currently closed.
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