“You can’t predict what’s around the corner, but neither do you want to live in fear of what might to come your way, so having an emergency fund is important.”—Adnan Glinac, Executive General Manager of Life, Australian Unity
Key points
- Living in the moment can be a positive thing, but it’s important to balance this with your future financial security.
- Understanding your cash flow and costs can help you to relax and enjoy occasional splurges.
- Creating an emergency fund, setting up an automatic savings plan, and educating yourself on the basics of investing can all help.
We’re often told to live each day as if it’s our last—and that’s good advice in some respects. It reminds us to be more present, to seize opportunity, and to embrace spontaneity.
But we do need to think a little bit about tomorrow.
So how can we balance our finances in a way that allows us to live in the moment without short-changing our future selves? Adnan Glinac, Executive General Manager of Life at Australian Unity, has a few ideas.
Live for today, plan for tomorrow
There’s a lot to be said for mindfulness: that is, living consciously in the “now”, letting go of worries about the past or the future, and being fully present to our immediate experiences.
Similarly, spending money on things that bring us joy—like a treat, a dinner with loved ones, or a much-needed holiday—can boost our relationships and connections, offer a mental reset, or improve our enjoyment of our everyday lives.
But living with presence shouldn’t come at the cost of our financial security, which, as part of the “golden triangle of happiness”, also plays a critical role in our Real Wellbeing.
“Absolutely live in the moment, but part of setting yourself up to do that is thinking about the things that keep your safety net healthy,” says Adnan. “And that means budgeting, understanding your cash flow, and understanding your limits.”
It might seem counterintuitive—how are you supposed to practise presence, while having your mind on your money (and your money on your mind)?
But, as Adnan points out, being in control of your finances is what really allows you to live in the moment. “Because then you know that you can go on that holiday, or to see that concert, or you can just have an awesome breakfast, or lunch, or whatever gives you your kicks, secure in the knowledge that it isn’t upsetting your safety net,” he says.
“So, yes, you should live in the moment, but you can’t be spontaneous all the time. You need to be really deliberate in the things that make you happy, without overextending yourself.”
Financial planning fundamentals: the “three buckets” system
Adnan really likes the idea of a “buckets” system, which he sees as a practical approach to money management that won’t chew up too much of your brainpower.
It involves setting up three “buckets”—one for your daily expenses as they are now, including any upcoming extra costs; one for savings/investments; and one for emergencies. That last one is very important for fostering the kind of peace of mind that allows you to enjoy life now.
“I personally try to set aside three months of my salary, and that gives me a great comfort that if I were to lose my job, or if something else unexpected happened, then I've got time to take care of things,” says Adnan. “You can’t predict what’s around the corner, but neither do you want to live in fear of what might to come your way.”
Make investing a routine
When it comes to your savings/investments bucket, Adnan’s tip is to settle on a reasonable figure—say, 10 percent of your salary—and then automate it. This means it becomes a habit you don’t have to think about.
He also recommends educating yourself on investing basics. For example, you could look into 10 Invest by Australian Unity, which is a low-cost investment bond with plenty of educational material to get you started.
Just don’t go parting with any cash until you’ve assessed your risk profile.
“The first step, before you invest in any funds, is to think about: if you lost 30 percent of your investment, how would you feel?” says Adnan. “What would be the consequences for you? The more comfortable you are with potentially losing that money, the more appetite for risk you’ve got.”
With super, a little goes a long way
Putting some spare cash in your superannuation every now and then is another easy way to set yourself up for financial security in the future, without affecting your play money too much in the present.
“Superannuation is an effective, efficient investing vehicle that you have available. Nothing is going to set people up for retirement like your superannuation—and the sooner you start adding to it, the better.” says Adnan.
With your super sorted, a budget worked out, and an automatic savings/investment plan set up, you’ll be able to relax and enjoy the moment all the more, because you’ll know you’re doing all you can for your future finances.
Or, as Adnan puts it: “You can worry about whether you are going to have enough or not, or you can be proactive and take control of the things you can control.”
Disclaimer:
Information provided in this article is of a general nature. Australian Unity accepts no responsibility for the accuracy of any of the opinions, advice, representations or information contained in this publication. Readers should rely on their own advice and enquiries in making decisions affecting their own health, wellbeing or interest. Interviewee names and titles were accurate at the time of writing.
10Invest is issued by Lifeplan Australia Friendly Society Limited ABN 78 087 649 492, AFSL 237989. Read the PDS and important information on our website. The TMD is also available on the website. Information is general in nature and does not take into account your objectives, financial situation or needs. You should obtain financial and taxation advice before making investment decisions.
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