What the heck is YOLO? Is that a typo for Yo-Yo?
It’s what the kids say these days: You Only Live Once.
True enough kids.
But what does that mean when it comes to saving for tomorrow?
What is the appropriate balancing act between living for today and having money in the future?
Does it differ from person to person or is there a rule of thumb most of us should aspire to?
I/we know our answers. Do you?
I suspect you visit this site because you want to learn more about saving and investing for your financial future, you’re curious about my financial path, you’re looking for some entertainment or maybe a combination of all three. You don’t visit this site to learn how to spend money frivolously, carelessly and run deeper into debt. You won’t find that here – YOLO doesn’t live here.
The premise behind YOLO if you don’t already know is to enjoy life now, to the fullest, even if that means taking on more debt to do it.
Most of my generation prefers experiences over stuff – I know we feel that way in our house. This however does not mean we’re willing to dive into more debt to travel or entertain ourselves. Maybe this is where we draw the line that others can’t or won’t. If we have to dip into our line of credit for a vacation, we don’t take it. Borrowing money for a vacation means we can’t afford a vacation.
So where does this leave me on this subject? We live for today but it’s only after paying ourselves first. This means we put a higher premium on tomorrow’s plans than today.
What plans? How far ahead?
That could mean a long weekend or week-long trip. We put a little bit of money away as savings every month so don’t need to worry about expenses for the trip when it happens.
We also have an emergency fund because we know $hit happens every now and then.
Finally we save for our future selves – retirement or semi-retirement.
Saving for Tomorrow
In the last few years, my wife and I have recognized we value our time more and more. Time to travel, volunteer more, work on demand, keep up existing hobbies, try new hobbies and so forth. Our time is limited with full-time work. We hope to change that within the next 10 years.
This is why we put a premium on saving and investing for today so our investments effectively buy us options with our time in the future.
A previous post on my site reiterated we tend to pay ourselves first using savings accounts, and mainly RRSPs and TFSAs before we live for today. This makes our savings rate north of 25% most months. We figure that’s pretty darn good. I wouldn’t want it any less than 15%. I suspect 50% or more would be too high for us and we’d feel trapped. This is our happy balance – saving 25% of our net income. I think most folks should aspire to 15% if they can. I know that’s a bundle but you’ll need at least 10%. I would be interested to know your savings rate and why…
Back to the theme, we tend to plan our work then work the plan. Planning ahead, whether that’s a few days, a few weeks, a few months, or even a few years out has allowed my wife and I to attend festivals, dine out, take international trips, or buy new clothes at leisure and debt-free.
I get living for today is fun. I mean, you can’t take it with you. We splurge on nice food and drinks often (maybe too often). But with some forethought you can almost live a YOLO lifestyle. It is just money after all but like other scarce resources you should try and use it wisely.
Our approach is to do a little bit of everything, financially, and not dwell on trying to be perfect or be like others. Only you can decide what your balancing act is and the lifestyle you want.
Are you a fan of YOLO, planning or both? How do you achieve your financial balance?