We live in an instant gratification society. When we want things, we want them now, so instead of delaying our gratification, we pull out a credit card or borrow money to buy what we want. So what does it mean to sacrifice now for your financial future?
What Does It Mean To Sacrifice Now?
Sacrificing now means you’re not going into debt, borrowing money, or buying something you can’t afford to pay for cash. Instead, you’re delaying your gratification or postponing your purchase until later.
This doesn’t mean that you can’t ever buy anything. Instead, it means you must fit it into your budget and save for it. I’ve been guilty of buying things using instant gratification, and I still do it sometimes.
The difference is today, I don’t borrow money and won’t charge anything on my credit card if I can’t pay it off at the end of the month.
How Delayed Gratification Can Help Improve Your Finances?
Learning to say “No” if you can’t pay cash or understand the differences between wants vs. needs is freeing and allows you to save more money.
I wish I had learned this a lot earlier in life. Then I wouldn’t be behind on my retirement or working side gigs trying to shovel money into my Roth and 401k.
Let me share how my new money mindset has helped me change my finances.
How Sacrificing Now Has Improved My Finances?
First, it’s allowed me to look at money differently. Instead of material things you use to buy, I look at money as freedom. The more money you save today, the more freedom you’ll have in the future.
It seems like an easy concept to grasp, but unfortunately, I grew up in poverty and learned everything I know about finances by listening to podcasts, YouTube videos, books, and finance blogs.
Here’s what I’m doing to build a strong financial future.
Setting Financial Goals
I’ve never been one to set goals because I didn’t know how or because I didn’t believe that I could reach my goals. But, after watching and listening to Jim Rohn, I’ve learned the importance of setting long-term and short-term goals.
Don’t expect to accomplish anything differently if you’re not taking the time to set goals. You need both short-term and long-term goals.
Short-term goals consist of things such as:
- Creating a budget
- Paying off high-interest debts
- Establishing an emergency fund
- Saving for vacations
- Building an emergency fund
- Setting a budget and sticking with it
Long-term goals are goals that take five or more years to achieve, and these consist of the following:
- Retirement planning
- Saving for a down payment on a car
- Investing in real estate
- Saving for children’s education
- Becoming debt free
These are typical financial goals that people set for themselves. So I suggest you start there, but you may have more goals to add.
Regardless, once you know your goals, you’ll do everything necessary to reach them.
How To Implement The Sacrificing Now Savings Strategies?
Regardless of your background, you, too, can change your mindset and financial future. I’m not saying it will be easy, but don’t expect anything to change if you don’t do something.
Here are some tips to help you get started.
Understand Wants Vs. Needs
The only way to achieve financial stability is to understand the difference between wants and needs. Needs are essential for your well-being and survival; these include;
- Clothing (not designer brands)
- Basic healthcare
Wants are things you may want or desire but you can live without. These include the following:
- Dining out
- Streaming subscriptions
These lists can go on and on, but you get the idea. The best way to determine whether it’s a need or want is if you can live without it without sacrificing your well-being. It’s likely a want.
I’m not saying you can’t buy something you want, but from here on out, you’ll budget it into your finances.
For example, we love using Doterra shampoo because it has no harmful ingredients like regular shampoo. So, I’ve set up a bucket in my Ally savings account to help me save money for the shampoo for future purchases.
Start allocating a reasonable amount to a savings account to pay for your hobbies, vacations, etc. That way, when you’re ready to buy, you have the money to pay cash.
Pay Yourself First
I’ve always been the type to pay my bills as soon as I get paid. Then after paying my bills, I would spend the rest of my money.
After listening to the “Richest Man In Babylon,” I pay myself first.
As soon as I get paid, I push money into my Roth, emergency fund, and savings account. The book says to pay yourself 10% of your income each pay period.
I’m working hard to pay myself 45-50% of my total income (including my business income). As you know, I’m 50 years old, and saving 10-15% won’t help me because I don’t have 40 more years to work.
I wish I could save 100% of my income, but I don’t want to save everything and not live for today.
Start Investing Today
You’ll NEVER get rich if all you do is work for someone else, no matter how much you earn. The only way to have a chance to become wealthy is to put your money into the biggest money-making vehicle in the world, which is the stock market.
I’m not saying you must purchase individual stocks or understand trading stocks, options, etc. I’ve been investing for the past 3-4 years, and I don’t do any of that complicated stuff.
My retirement accounts consist of index funds and ETFs because they are much safer. I’m not a gambler, and I don’t have a lot of knowledge when it comes to investing, and I don’t want to lose my hard-earned money.
The more you can invest, the faster you’ll reach your financial goals. Unfortunately, I don’t earn a lot, and my business income has dropped because of the economy, so I’m looking for more ways to earn extra money to invest.
It doesn’t matter if you earn $100,000 per year. The only way you’ll build wealth is how much you can keep and invest.
The first step to financial freedom is learning how to sacrifice today so that you can enjoy tomorrow. It’s not easy; most people thrive on instant gratification because our society is built for it.
Companies understand the importance of instant gratification in consumer behavior, especially with the rise of technology and the Internet.
Don’t become a victim of their marketing tactics. Instead, take personal responsibility for your finances to have a better financial future.