Two roads diverge when we become adults, and the path we choose is frequently influenced by the opinions and lessons of our parents. When it comes to saving and financial security, do you start right away or take a bit of time to enjoy yourself? Is there a way to get all the things we want in life without jeopardizing our long-term financial security? With limited resources, it can be difficult to save for a variety of big-ticket expenses, such as a house, college education for our children and retirement somewhere down the road. Along the way, how do we prevent the purchase of a new car or a memorable vacation from derailing our goals?
That’s one of the factors considered by students who take a “gap year” before or just after college — before getting “a real job.” In fact, some seasoned parents will advise their children to go ahead and enjoy their financial freedom while they’re young before getting tied down to the responsibilities of a mortgage and raising a family.
However, just because young adults want to live a little doesn’t mean they don’t eventually want to own a house or start a family. By the same token, mid-career professionals and families with children who juggle a mortgage, education expenses, vacations, automobiles, braces, summer camps and other expenses know that each financial decision could impact their lifestyle during retirement. It’s a constant battle to decide where and how much money we can spend without jeopardizing our long-term goals.
The key is to balance a saving and spending strategy that allows for a satisfactory standard of living today without sacrificing our lifestyle tomorrow. [Read more…]