Don’t Borrow Against Your Future Self

laurieWhen Rick and I were young and first married, we had a bit of a “que’ sera, sera” attitude about our finances.  There was stuff we wanted, like a house, cars, clothes and vacations.  When we didn’t have the cash to pay for these things, we would simply borrow for them. Our attitude was, “After all, we can afford the payments, and our income will only increase from here.”

The problem with this line of thinking is that nobody knows who their future self will be.  I never thought that I’d want to be home full-time with our kids.  After all, I had a great part-time job in the mortgage industry that paid terrific money and allowed me to work from home a lot.   I thought I’d always work there.  The problem was that I didn’t know that my future self would be laid off from that job due to a declining economy, and I didn’t know that my future self and my husband’s future self would feel so strongly about me being home with the kids, as opposed to taking another job, which would have forced me to work full-time, outside of the home, to earn half of what I was making at my other part-time job, but that’s what happened. 

Another thing I didn’t know about our future selves is that we would one day get sick and tired of the rat race and suburbia living, and desire a home in the country, and a slower-paced life.  We didn’t know that we’d want Rick to retire early, and that we’d desire to travel a bit.

If we had been responsible with our finances from the beginning, these changes would’ve been a piece of cake for us from a financial standpoint.  In the early years of our marriage, we were making good money, and had comparatively minimal expenses; however, instead of being frugal and saving, we chose the “You only live once” lifestyle.   This attitude hindered our ability to follow the dreams of our future selves.  We now find ourselves back peddling real quick to undo the financial damage we did during the first 17 years of our marriage, in order to make the next decades of our marriage more in line with what we want.

Lessons learned?

  1.  If you’re young and newly starting out, consider your future self.  Don’t assume that you’ll want the same things in your 30’s, 40’s and 50’s that you do now.  Instead, commit to staying out of large amounts of debt, and commit to saving at least 5-10% of your income, no matter what.  These strategies will give you some financial cushion to handle the desires of your future self.
  2. If you've already borrowed against your future self, make a plan today to learn about budgeting, spend-tracking, saving and investing, and commit whole-heartedly to turning your financial ship around and making today’s dreams happen sooner rather than later.

Borrowing against your future self is almost always a bad idea.  You never know what your life or the economy will bring down the road, so do your best to have a secure financial foundation in place, so that you can be prepared to chase the dreams of your future self, whatever they may be.

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  1. Great points. If there’s anything that we can be sure of the future, it’s that it probably won’t turn into what we plan. Make sure your future self is able to thank your current self.

    • Great point, Syed! I love what you said, too, about making sure your future self is able to thank your current self. Hindsight certainly is 20/20. :-)

  2. What a great post, especially good for twenty-somethings!!
    I want to show this to one or two of my kids. I have 4, too, BTW!

  3. This is some great advice. Things change as you get older, and you don’t really know what will happen. I never thought I’d struggle to find a job, be on food stamps, etc. I am not in that place now, but never thought that would be my reality. I also hope I don’t make less than I do now, but I know it’s possible considering my recent past. You need to prepare for the future and plan for your dreams, and also be flexible.

    • “You need to prepare for the future and plan for your dreams”. Great advice, Melanie. I know we’re both on the way to fabulous financial futures. :-)

  4. You’ve made some great points, Laurie! Hopefully, I will never be making less than I do now, but it’s hard to predict my future desires or abilities. What if I got sick? What if I needed to take time off to take care of family? It’s best to be prepared for these by not borrowing from your future self, as you’ve stated.

    • So true, Addison, or what if you wanted to give money to family. All sorts of situations could arise. Being near our 50’s now, we’ve really learned that to be true.

  5. Oh goodness, I really hope I don’t ever make any LESS than I do now. But you have a good point, you should never assume that things are going to get better or easier and use it to justify your present.

    • So true, Stefanie, and I think a lot of people do that, and that’s what leads to a lot of money issues.

  6. My husband just turned 30 today. We were talking about how different he is from when I met him at 25. I’m glad that collectively, we haven’t made too many major financial decisions when we were younger!

    • Michelle, this is a very good thing. You guys have made smart decisions from early on, and that’s a great blessing to your relationship – congrats!

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