There’s a funny thing about the future: it’s never now.
It’s always off over there, and as such it is rather easy to ignore. After all, we’ve got to look where we’re stepping at the moment, and if we look too far down the horizon we risk stepping in potholes, muddy puddles, or worse.
That’s the difficult with planning your future in any capacity, whether financial or personal. You probably know you want to accomplish certain things in the future, but your goals are big, and far enough off that you don’t know how to continuously move toward them.
The answer, we believe, is to break those goals down. Yes, you’ll benefit from having more of a forward-thinking mindset, but you can’t set yourself up for failure. You need practical, attainable tips for moving toward the most important goals in your life.
These five steps should do the trick nicely.
1) Start Your 401(k) Early
Chances are, in the priorities of your everyday life, retirement isn’t even in the conversation. Yet, it’s one of those things that you could always look into “next year,” and you don’t want to put it off forever.
If you have an employer-sponsored 401(k), consider putting even small amounts of money towards it. Set it up to draw automatically from your paycheck or bank account and then put it out of your mind.
One psychological benefit that you may not realize is that the sooner you start contributing to a 401(k), even if were only $5 a month, the sooner it becomes a normal, established part of your budget. You’ll see that contribution every month when you look over your upcoming expenses, and you can choose to ramp up your payments as your income grows.
2) Start at the End and Work Backwards
This is the ol’ “legacy strategy.” It’s asking yourself what you want to have accomplished by the end of your life. How do you want to be remembered?
Achievements don’t usually reach themselves, so if you wander aimlessly through your day-to-day life, you increase the chance that you’ll look back later and regret your lack of focus. This is not at all to say you shouldn’t enjoy yourself, relax, and be spontaneous. It’s only to say that the major milestone goals—who you are, what you do, where you go—are largely a product of effort and intentionality.
This includes career and personal goals, as well as bucket list items. But know that those goals probably won’t be fulfilled by the route you expect, or even in the way you expect. Allow your end goals to inform your choices, but be flexible and determined enough to account for unpredictable paths.
There’s a great Forbes article that recommends not simply looking at what you want to accomplish and working backwards. Instead, it suggests thinking about what you desire, then taking the next best step for achieving it. Specifically, the article laid out five steps to follow iteratively:
- Determine your desire
- Take a small step toward it
- Learn from taking that step
- Take another step
- Learn from that one
It’s a very simple formula, but it’s actually far more effective than either having no plan for the future or having mountain-top goals with no understanding of how to scale the summit. The only way, truly, is one ledge at a time.
3) Save for Your Children
Children, at least future opportunities for your children, are another area of financial spending that is just hard to grasp in the moment. Most parents want to save something to set their children up for future success, whether that be a college fund, wedding fund, or a fund for them to “make it” in a skill, trade, or industry.
Basically, you can see the same exact advice we gave for Number 1 and apply it here. The sooner you get savings for your children into your conscious awareness, even if you’re setting aside $2 a month, the sooner you’ll see it as a legitimate and worthwhile area to be putting money aside for.
4) Write Letters to the Future
This one might come across as cutesy, but writing to letters to people you love in their futures is usually received very well, for reasons I’ll describe in a bit.
If you’re single and want to be married one day, write to your future spouse. Tell them how you plan to treat them, what type of character you envision them having, and even what you are doing and feeling in some of your daily life now.
If you’re a parent, write to your children at 18. Tell them what they’re like as younger children. Tell them what you hope for their lives and futures.
If you’re in a committed relationship, write to that person about what you think of them now and where you hope your relationship will be in 5, 10, or 20 years. Write your expectations, then compare the reality years later.
These letters don’t just make people feel appreciated. Appreciation is something that can (and should) be given in our present lives, as often as possible. No, the real appeal of letters like these is that you’re capturing moments in the history of your life and family, documenting them, then sharing a first-hand account for your loved ones to see later on.
Letters to future spouses will help them see who you were before they knew you. Letters to children will help them understand where they came from and the context around their early life. Letters to your significant other will help them remember the ebbs and flows of the relationship and get a glimpse into how you have seen the world during all of that.
It’s a powerful way to let someone into your own mind, while also stealing a moment out of history, and telling the people you love most that they have been on your mind all the while.
5) Study Financial Terms
A 401(k) sounds wonderful, you might think, but what is it? What is a Roth IRA? What is actually the difference between a checking and savings account, if there is a difference?
Many people don’t invest in their financial futures because they don’t understand the terms and structures around those investments. For them, a simple and unintimidating way to plan for the future is to just learn what all that fancy money talk means. They won’t have to spend much money at all to do so, but as they learn more and more they will be better able to make informed decisions about their money instead of hoping they are trusting the right people with something so important.
Draw from a diverse pool of resources: local financial advisors and institutions, investment books, podcasts, and the hard-won lessons of family and friends over the years.
Increase your financial literacy, and you increase your ability to carve out the type of future you envision for yourself.
The future may not be a fun thing to think about, but it is so incredibly important. And luckily, it’s not such a hard thing to get a grasp on.
Take some of these practical baby steps, most of which will cost you little to nothing, and start shifting your mindset to look a little more toward the future every day, while not missing the present.
By: Ryan Drawdy
June 21, 2017