F5: Finance: Why Every Dollar is a Message to Your Future Self

A mentor once told me in my mid-20s that everyone comes to work for their own reasons. For me, I enjoy being able to buy my wife nice things and I want to be able to retire comfortably someday. Whatever your motivation is, the math of finance remains the same. It is a straightforward formula:

Income - Expenses = Savings

The goal is to keep that last number as large as possible. When you save money, you are putting it into your own future. On the other hand, when you borrow money, you are taking it from your own future. Being intentional about your finances means deciding that your future self is worth more than the temporary thrill of a purchase today.

There is an old American saying that tells us not to count our chickens before they hatch. My friends in Montreal have a similar version: do not sell the skin before you have caught the bear. In modern terms, this means you should not live beyond your means based on a bonus or a tax refund that has not arrived yet.

If you feel the need to buy something because a big check is coming, trust me that someone will still be selling that same item after the money is actually in your bank account. Avoid the trap of spending money you do not yet possess.

I want to be very clear that I have experienced the season of life where there was barely enough money to survive. I have been in the position where, even after trimming every extra expense and eating the bare minimum, the numbers still did not add up. If you are in that spot, it is not a choice, and it is incredibly difficult.

However, I also know many people who are in the habit of being broke. They spend every last penny until the next check comes in, but upon closer examination, they are spending on frivolous things. Endless streaming services, gaming subscriptions, and extra cable packages add up quickly. Often, they are also paying too much for insurance or cell phone plans because the most convenient option is rarely the most economic. The more you can save now by cutting out the convenience trap, the more comfortable you will be later.

In our modern world, we spend money through apps and cards, which makes it easy to lose the fundamental understanding of where our money goes. This is why a written budget is essential. You need to see exactly where the money is coming from and where it is leaking out.

I recently took a road trip from Denver to Atlanta and back. It was a quick trip, and I made sure to save every single receipt. When I got home and spent five minutes adding them up, I was shocked to find I had spent $50 just on gas station coffee. I can buy a full bag of high quality Starbucks coffee for about $10. By not being intentional, I spent five times more than I needed to for a product that was not even as good. Without the intentional review, I never would have noticed that leak.

Take a look at your own receipts this week. You might be surprised at what your money is trying to tell you.