When you read through blogs or scroll through hashtags and memes on social media, there is a recurrent theme among millennials regarding the live-for-today sentiment. Whether it’s the acronym, #YOLO (You only live once) or the older, maybe not-so-cool phrase, ‘Carpe Diem,’ we are constantly reminded that we should stop worrying about the future and focus on today. But when it comes to your finances, is society sending us a detrimental message?
When addressing one’s plans for retirement, it is sometimes difficult to find a happy medium between the avoidance of financial responsibilities and the overwhelming, anxiety-inducing worry over one’s financial future. Below are two very common thought processes that I see often.
1) I am not worried about the future now, I’ll deal with it later
Unfortunately, our day-to-day pressing needs and our live-for-today goals become the priority and we cannot focus on or visualize what is not right in front of us. We tell ourselves, ‘I’ll do it tomorrow.’ Whether it’s not participating in a 401K because the extra monthly money is needed for utility bills or prolonging the start of a college savings fund for your child because you have mortgage payments to make, you are setting yourself up for a worrisome retirement.
It is important that you stop and visualize, in vivid detail, a big retirement goal. Are you visualizing being able to enjoy the finer things in life or are you just hoping to maintain the lifestyle that you are living today? What details do you see when you make this visualization?
Consider these important factors while you are visualizing:
If I continue at today’s rate-of-saving, what will my savings be at retirement?
Do I have children? Do I plan to have more children?
Do I plan to send my children to college?/Can I afford college tuition?
Do I own a home? Do I have a mortgage?
Have I planned for rising health concerns as I get older?
If something should happen to me, will my family be taken care of?/What kind of debt will they incur?
2.) I worry so much about my future financial position, that I sacrifice my daily happiness
Studies have shown that intense worrying about money or financial situations can affect many aspects of your life from mental health, to relationships, to career. When consumed with worry over your finances, it can inflict on your ability to focus thus creating a distraction and inability to enjoy the present.
While it is important to plan for the future, it should not be so overwhelming that it interferes with one’s day-to-day abilities. Ask yourself:
What am I really worried about?
Is it something in my control? If so, am I taking the necessary steps?
If it is not in my control, what steps can I take to ease my anxiety?
Do I have a financial advisor that can help to address financial concerns and alleviate unnecessary worry?
Whether you identify more with the first or second way of approaching your finances, or possibly somewhere in the middle, it is important to address your financial concerns with a trusted financial advisor. Unnecessary worry can cause you to feel paralyzed, out of control, and unable to make the right financial decisions concerning your retirement. However, failing to address future financial responsibilities, and avoidance altogether, can prove to be counterintuitive, creating anxiety and worry at a later date. Suddenly financial responsibilities show up at your door and you no longer have the option to ignore or put off. In taking small steps along the way, you can gain control of both your finances and your worry.
Call Brad Sherman at Sherman Wealth Management today and set up a no-cost financial consultation.
Learn more about our Retirement Planning services.
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