I’ve always aspired to “live in the present” since reading Eckhart Tolle’s The Power of Now. The basic premise is that one should not dwell on the past or the future but simply enjoy the present moment without worry or anxious anticipation of what is to come.  The concept that  stood out to me the most was that one should only concentrate on the problems that can be dealt with at that very moment.  Money-related issues are just as applicable as anything else to these principles.  Here’s my take on the past, the future, and how those impact decisions made in the present.

Learn from the past

We’ve all done things we regret.  That’s perfectly fine, just do your best not to repeat.  My initial thought (and maybe yours, too): where do I begin?!  I’ve made some foolish money-earning decisions in the past.  One summer, during college, I was unemployed and broke.  It was the worst summer I can remember (even worse than when I worked 6 days a week, starting at 5:30 am).  But I learned this from it: I always need to have “work” to do, not just for income, but also to keep motivated and feeling as though I have a purpose.

I’ve gone through credit card debt problems, but I’ve vowed never to go down that road again. I’m actually glad that this happened earlier in life.  I learned quickly how frustrating and difficult dealing with credit card debt can be. Now that I know what it’s like, I’m much more careful with how I manage and use credit.

But definitely repeat the good decisions you’ve made.  Buying a used car (apologies for writing about cars so much lately) tops my list.  It’s been cheaper to own, and my quality of life hasn’t suffered one bit versus buying a new car.  I’m also thankful that I avoided loan debt through college, and I hope to stay out of debt of all kinds whenever I reasonably can.

Look to (but don’t live in) the future

Live on what’s in your bank account, not what you’re expecting to be there. Be cautious with credit cards and spending money you haven’t been paid yet. While I do not carry a balance on my credit cards month-to-month, I’ve run into times where I spend on my credit card before I receive my direct deposit.  This is the wrong approach.  I should be making the money first and then spending it.  Fortunately, I receive a salary for my job, so there’s never any doubt of if I will get paid or not. But it’s definitely a tough cycle to break.

Don’t spend based on future fortunes you think you’re going to make.  This is an easy pitfall for anyone but especially those still in college.  The attitude is “I’ll live it up now and pay for it when I make that fat paycheck later.”  There’s a few problems with this.  First off, you don’t make the big bucks yet.  You can dream all you want, but until you are actually pulling in that amount of money, you shouldn’t be spending it.  Secondly, paying back the debt won’t be fun.  With crazy high interest rates, your debt will increase at a rapid pace.  While you may look back on that time of spending fondly, you’ll surely wish at some point that you hadn’t racked up all that debt.

But do save for the days to come.  This goes with the last point.  It’s actually the exact opposite.  Instead of spending more than what you have at the present moment, you should be spending less than what you have and saving for the future.  The last point involves living in the future, which I don’t condone.  But smart planning is always okay.  You should be prepared for the unexpected with emergency funds and for retirement with investment accounts that are funded regularly and adequately.

There are a lot of emotions tied to our past experiences of money and our anticipation of a better financial future. But the most importance lies in the decisions that we make right now, in the present, since those are the only decisions that can truly shape our future.

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photo by: iamliam