We all save for tomorrow – the future. But when does that “future” actually come? Have you considered buying certain things in the present?
This being the 100th post on stepupmoney.com, I could have easily done something to co-relate to the number 100, like 100 ways to save money or 100 tips to better investments or 100 ways to invest better or 100 tips for this and that and blah, blah, blah. But then it is way too boring to actually contemplate to write let alone reading 100 things about something that is already there, out here on this site and at some other places as well. So instead, let us talk about SPENDING MONEY. Hey, it is way better than saving, right?
What if that “Future” never came?
We all save for our “future”, don’t we? It is always a thing with us, if we are saving, it is only for the future, the tomorrow or the rainy day whatever, but is not for today; since today we are saving. We will strive hard and keep earning and saving and then one fine day we sit and realize, ‘hey, what was I saving for, when is the future actually coming…’ The answer is the future never comes. There will be times when you and I would be a thing of the past, but still that future wouldn’t have come.
Something what happens with Gold Investments in our country. We keep buying gold, in all sorts of forms and we say we are ‘investing’ in it. However when anyone is asked when do you liquidate your investments to get returns on it? The answer is often, “I don’t need it right now. I will do it when the need arises in the Future”. This has led to Gold being practically a dead asset for us. It is the human psyche that puts pressure on itself that even if you are saving in a disciplined manner and are very systematic and committed to the savings and investments routine, you still feel guilty of using that money on most occasions until it is too late.
So does that mean that whatever I have written in the course of the 99 previous articles on stepupmoney is irrelevant? … And that you all should be spending everything without saving anything?
NO. You should still save and invest and keep doing it till you breathe your last. But at the same time be reasonable and practical about it too. Simply mindlessly saving, saving, saving and investing, investing, investing is pointless. Remember we have one life to live, I always say that, and hence it is important to try and splurge at times, pamper yourself and your loved ones time and again, make purchases you have been waiting for, take that vacation you have wanted and then keep on saving and investing.
There is also another factor – Age:
When it comes to saving and investing and spending. Certain purchases if made while young can make your life a lot easier down the years and if at that time you think you need to save for the future, your future can be a bit more financially complicated to allow you to actually think of that.
If you want to own a vehicle, especially a car, it is way better to buy it while you are young and free from family responsibilities.
This is because as you grow older, you will be married, then have kids and then have a whole family to support and at that time the money you would wish to spend on car would be torn apart between various other EMIs, schooling fees, household expenses and a lot more. If you are single and young then make the car purchase today and DON’T WAIT for the FUTURE.
You do not need to buy a Mercedes or BMW or not even a 6-7 Lac sedan for that matter. A small compact hatchback is fine, but it will be your first car, a part of your dream come true. The EMI you pay while you are young will not burden you as much as it will when you are old. The expenses are limited today so it is a lot easier to own that car. Of course you will change your car in the future and it is in no way a permanent asset, but trust me, once you own a first car, changing it and buying new ones down the years is a lot easier. It just happens.
Same goes for property….
You need not buy a home at a young age; you may not even have the money for down-payment at this early stage in your career. But you can always invest in smaller places with better future potential. The down-payments are low, the overall costs are lower, and the EMI is affordable. This way when the need arises for you to buy a home somewhere around where you live or want to live, the sale of that property can go a long way to fund your home-buying expenses.
If at this stage you are scared of EMI and the commitment then, bear in mind that in the FUTURE the costs, EMI, and financial burden will be two-folds if not more.
It is better to have a backup for that day, right now. If you can afford a few thousands a month for EMI then invest in a small property today. In the next 5-7 years when you would want to buy your home, this property would have appreciated well. Of course good research is essential before you put in any money.
So what does all this mean?
When should you save and when should you spend? Well, as I mentioned at the start, save forever, keep doing it, it may help you in your later life and also the ones you leave behind. However keep targets for the investments and for your life-goals. If you plan to buy a car, make sure you have a time frame that when I am X years old, I will buy a car, when I am Y years old I will invest in property, When I am Z years I want a foreign vacation or when I am a bit older I would need X amount of money for kid’s education, marriages etc or for retirement. Once these goals near, make sure you fulfil them by spending and buying these things. Just do not keep on saving and investing without a vision or pointlessly. One Life to Live; Remember?