“You May Delay but Time Will Not”

Benjamin Franklin’s words still ring true today. Since the time he wrote “The Way to Wealth,” there has been no shortage of information and good advice to guide us along the path of personal financial security and independence. Familiar old adages, such as “a penny saved is a penny earned” and “a stitch in time saves nine,” remind us that the path to prosperity can be found if we are careful in our spending and start saving sooner rather than later. However, many of us act like the proverbial ostrich. We act this way because we believe that planning for our future isn’t worth “the effort.” The truth is, the sooner we begin working on our financial plans, the better. Let’s take our heads out of the sand to explore some common reasons for avoiding our personal financial plans and learn what could be gained by starting now.

It is Futile (because I don’t have enough money): Thinking about our personal finances can be discouraging or frightening. Headlines abound with stories of a generation of Americans woefully unprepared for retirement. While the gap between today’s reality and tomorrow’s dreams can seem impossible to bridge, a thorough review and organization of personal financial information can help “find” the money needed to achieve financial security. Many of us have some level of discretion when it comes to setting a budget. Understanding where our money comes from and where it goes each month can help us redirect our spending to achieve our long-term goals. Cooking more meals at home, shopping for discounts, or cutting back on utilities are just a few examples of the many choices for reducing monthly expenses. However, making such choices can be difficult in the absence of an overall financial plan. Setting goals can help us prioritize our spending and determine what expenses we are willing to reduce today to achieve our goals for the future.

It is Better to Wait (because I will have more money later): We may rationalize that we do not have enough money to begin saving today and we will start later, when we earn more than enough to meet our “needs.” Or, perhaps we will enjoy some kind of windfall such as hitting the jackpot, receiving an inheritance, or marrying rich. When that happens, we think, we’ll finally be on the road to financial security. Unfortunately, we can grow old waiting for that special “someone” or “some day” which may never come. Yet, in the meanwhile small amounts of regular savings could make a real difference in our future. For example: I could save myself a $100 every month if I brown bag my lunch each day. If I invest this $100 in an account earning eight percent, after 20 years I’ll have accumulated $60,000. For most of us, waiting is not a good option because it takes many years of consistent savings to achieve financial security.

It is Difficult and Tedious: Personal financial planning requires effort and commitment. There are several tools available that can make the job easier. For example: software to create and track budgets, smart phone applications to monitor expenses, or calculators to determine how much to save today to meet goals for the future. Even so, the process of creating and monitoring a financial plan may be too much of a burden to handle alone. In that case, working with a personal financial planner may be your best option for getting on track. 

Choose Your Destination and Commit to Achieving Your Goals: Focusing on the possibilities can help you make the necessary changes in your spending behavior. To map your course toward your future goals, begin by noting the gaps between your future dreams and your current reality. Next, determine what changes would be needed in order to fill those gaps. The wealth equation is simple: what you own minus what you owe equals your net worth. While the recipe for success may be simple, it isn’t easy. Building financial independence requires us to focus on the facts and commit to the discipline necessary to reach our goals. 

As Ben Franklin said, “Never leave that till tomorrow which you can do today.” 

FPA member Jean S. H. Schwarz, CFP^®, is a personal financial planner working in McLean, Va.