Enjoy Life Now And Still Save For Later

By William Artzberger AAA

There used to be a television commercial in the U.S. for Michelob beer. It had a little jingle that started with, "Who says you can't have it all? Who says you can't have pin stripes…and rock and roll?" The commercial went on to show how those who drank Michelob could enjoy a great beer that also was not so bad for them.

In our financial lives, we face the same predicament. How can we balance satisfying the desire to live well now with satisfying the desire to retire well? Is it possible to do so? And, what exactly does it mean to "balance" these two desires?

Weighing Your Options
The good news is, it is possible! Balancing these two needs simply means making sure you are keeping your financial house in order while you are enjoying your lifestyle. Individuals can learn to balance these two often-conflicting goals - lifestyle goals and retirement goals - by using the following four-step process:

1. Assess Your Situation
Begin with analyzing of your lifestyle. One way of doing so is to make a list of questions you want to ask yourself. This simple test might be called the 'happiness barometer'. Examples include the following: "Am I happy with my current lifestyle?"; "Do I feel I have enough financial resources to sustain my lifestyle?"; "Am I enjoying life?"; "Are there things I want to be doing, but have not yet begun to pursue?"; "Am I living where I want to live?"; "Am I driving the kind of car I would like to drive and, if not, how important is that?"

Then take a look at your finances, and add questions to your list such as: "Am I saving enough for retirement?"; "Am I able to pay my bills on time?" and "Do I have enough disposable income?"

If you answer "no" to a number of these questions, then you may need to revise some of your goals, change your lifestyle or both. These revisions should focus on needs versus wants, and the things that will help to provide joy and satisfaction. (To keep reading on this subject, see Life Planning - More Than Just Money.)

2. Develop New Goals
If you find a disconnect between your lifestyle goals and your retirement goals, it very likely means that you need to either develop new goals or revise your existing goals. Make sure that these goals are realistically based on your financial resources. Again, you will need to distinguish your wants from your needs.

Lifestyle Goals
To help you keep on track with your lifestyle goals, make a written list of the things you want to do - a list of things that could make your life more pleasurable. This "pleasure list" can include, but is not limited to, hobbies you'd like to pursue, places you'd like to go, restaurants you want to try, where you want to live, what kind of car you want to drive and charities you'd like to support. (For related reading, see Retire In Style.)

Retirement Goals
Review and assess your retirement goals to determine whether you are on track with your financial goals and objectives. This includes reviewing your budget and making any necessary revisions. (For guidelines on budgeting, see The Beauty Of Budgeting and Stretch Your Retirement Budget.)

If you have not yet established retirement goals, now is the time to do so. If you need help with this, seek out a qualified financial planner. (For tips on choosing a financial planner, see Find The Right Financial Advisor and Shopping For A Financial Advisor.)

3. Devise a Plan
Once your lifestyle and retirement goals are in place, the next step is to determine whether they can co-exist. Incorporate the two sets of goals into your budget, and add dollar figures for each lifestyle goal. This is one of the key areas where you will begin to make any necessary adjustments by cutting out non-necessities.

Do not jeopardize your retirement goals. Instead, cut back on less important budget items. For instance, a lifestyle goal may be to play golf one Saturday each month. If your finances fall short of allowing you to enjoy this hobby, instead of removing it from your list, look elsewhere in the budget for a source of funding. For instance, you may find that taking leftovers to work instead of buying your lunch two or three days a week could increase your disposable income. Make it happen! Review each lifestyle goal and determine what it is you need to do in your budget to make achieving this goal achievable. The idea is to make your budget work for you and not vice versa.

4. Monitor and Reassess
After you have put your plan into action, check at least once every three months to ensure the plan is on track, and reassess your goals, objectives and budget at least once each year to determine whether you need to make any changes. Monitoring and reassessing may need to occur more often if you are falling short of your goals and objectives.

Make sure that you determine what went well, what didn't and what you need to change. As you go through this process, you will find that your lifestyle and retirement goals may also change. Welcome change as part of the process. Be willing to adjust, but be hesitant to abandon important goals. Be persistent in going after what you want.

Conclusion
To balance living well now with retiring well, begin with an assessment of your current situation. Then develop a new set of lifestyle goals to achieve what you want. Put a plan in action by determining how you can achieve your goals within your budget. Finally, monitor your plan on an ongoing basis.

Over time, if you're sticking to your goals and objectives, you should find that your quality of life - and the comfort factor of knowing you'll have enough to retire - will improve. And that's the ultimate goal, right?

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