A hundred dollars in your hand is a physical object but it represents your future spending and your potential lifestyle. Whether you spend it later today or 20 years from now, it is available for spending which increases your lifestyle. When there is no extra money then your future spending is zero and lifestyle will be falling. This is a concept that many people avoid until it is too late to save for an event, an emergency, or retirement.
The U.S. Federal Reserve Board just released the results of a poll that indicates 31% of Americans have no retirement savings at all and 52% of Americans could not come up with $400 for an emergency. Since the 2008 financial crisis, over 2 million Americans over age 55 could not find work and were forced into an “early retirement” of financial struggle.
Any savings that you set aside creates the possibility for a future with a: large purchase, vacation, education, new vehicle, or the possibility of a comfortable retirement. In order for your savings goals to be met, your money that is set aside must be earmarked, scheduled out, and defended from being spent on something else.
When you place your savings or investment money with a person or institution, you must be certain that it will be professionally managed in a conservative manner. This money will become your physical future and if it is mismanaged then so is your future lifestyle. A month does not pass by in the news without some kind of Ponzi scheme or fraud where many victims had placed much or all of their money with a smooth-talking criminal. All of the victims believed they were dealing with someone trustworthy so they did no homework on the person or the investment. The victims did not perform an audit, due diligence, review, or background check to be certain of its legitimacy. Instead, they just handed over their life savings only to have it all stolen.
Determine financial goals that are important to you and support each of them individually with savings rates and targets to make them happen. Then you will need to defend this money from unscrupulous operators and even yourself from spending it on something else when it is convenient.