Hey everyone, it’s Finance Fridays again. Today is just kind of another reflection type of post… we’re going to ponder “Live for Today, Save for the Future“.

Live for Today, Save for the Future?

Yea.

I think these are two separate mantras that people seem to think about when it comes to finances. At first glance, they may seem like they are completely at odds with each other, but I’m here to tell you that they don’t need to be.

We’re going to start with the 2nd one first.

Save for the Future

Well, this one is somewhat self explanatory. I think the majority of people understand the concept of needing to save for retirement. They may not completely understand the powerful concept of compound interest. However, I’m pretty sure everyone has heard of needing to save for retirement… save for the future.

As physicians, this concept is kind of difficult for us to grasp because we feel so far behind after finishing our training. As physicians, who were generally in the top of our class growing up — we’re not used to “being behind”… like on anything, like ever.

In general, the majority of those coming out of residency/fellowship and starting their first jobs are probably in their early 30s. You’ve (we’ve) most likely missed out on the previous 10 years of compound interest. I’ll assume that most of us were unable to maximize a Roth 401k in Residency. However, if you were able to, then you are miles ahead of me (and many).

If you add student loans into the mix, then it’s kind of a hard to deal with the concept of “Save for the Future”. However, you know that you have to do it, so in general you try not to make The Biggest Mistake of Your Life, and maximize your 401k (and 457 if available) and do your Backdoor Roth IRA.

For those of you who are saddled with significant loan debt or even soul-crushing loan debt… you may find out that after starting your first job and doing all of the above, that your lifestyle didn’t change at all. While you have chosen to “live like a resident” — you almost feel as if it was forced on you.

I’m here to tell you… that’s ok. You are where you are supposed to be.

You are doing what you can do to Save for the Future, even if it doesn’t feel like it.

Live for Today

I think this concept is something that people (and physicians) struggle with. There are many versions of this mantra which vary from Carpe Diem to You Only Live Once (YOLO). While they have different connotations, the underlying meaning is that you should “Live for Today”.

However, I think that when it comes to Finances, people misunderstand what “Live for Today” can mean. Since you’ve already decided to “Save for the Future” above, it may feel like you don’t have any means left to “Live for Today”. I don’t think this is necessarily true.

You don’t necessarily need a lot of money to Live for Today. It’s more of a bunch of different choices you make on an everyday basis to take advantage of the things available to you that are cheap (or free).

For example, just going out to get food with friends can be cheap (or even free if they pay for me). It could be spending a few hours trying to teach my daughter how to throw a fastball and a changeup and teach my son to swing a bat. Or just watching the Dodgers game leisurely. Or doing date night with my wife.

I guess when I say “Live for Today”, you should reflect on the choices you’ve made for the day to make the most of your time. The idea of “Live for Today” doesn’t have to be as adventurous as jumping off a cliff or skydiving, it can be as mundane as what I’ve stated above. Just because it may sound mundane to other people, it doesn’t lose any of its value to me.

This kind of all goes back to the Value Cost Ratio that I tend to harp on. Only you can set a value on what is important to you. However, focus on the things that have high value and low cost.

You’ll be surprised by how much you don’t need to be happy.

What about you?

Well, for me, I’m 5 years out from finishing residency/fellowship. My wife and I still have student loan payments and mortgage payments to make. However, our jobs are pretty stable and we have our insurance (life and disability) in place. The 529s are being reasonably funded on a monthly basis. Our plans to “Save for the Future” are pretty much already set in stone and will continue like clockwork.

This didn’t happen all at once… and for the first 3-5 years after getting our first jobs, and moving, and changing jobs again — and then buying a house, it’s been pretty difficult. We certainly didn’t feel comfortable. However, like I’ve stated before, I’m at least not uncomfortable anymore. At this point in our lives, we’ve been able to take a few punches and weather a few storms and still be ok. So I’m pretty optimistic about the future.

That said, I’ve finally been able to understand what “Live for Today” means to me. It has nothing to do with spending money. It has everything to do with maximizing the free time I have to do whatever I value. While it may not be quite that valuable to other people, it’s the highest value for me.

In fact, my friend just texted me today if I wanted to go get burritos with him for lunch next week. While this may seem pretty mundane to some people, I haven’t had lunch with him in awhile and it’d be nice to catch up. Also, the burrito place we’re going to the best on the island. So if I’m off work, I’m definitely going.

Live for Today.

It doesn’t have to be “instagramable” or “facebook worthy”. It just needs to be something you’ve chosen to do with high value to you.

TL;DR

Save for the Future.

Live for Today.

It doesn’t have to be “instagramable” or “facebook worthy”. It just needs to be something you’ve chosen to do with high value to you.

Life is short. Be Happy.

-Sensei

Agree? Disagree? Questions, Comments and Suggestions are welcome.

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