Many lifestyle gurus have sold the idea of living for the moment and that we should only do that which makes us feel good.  Looking at Instagram and you'll find 27.8 million pictures with the hashtag #YOLO, the acronym for “you only live once.” This phrase indicates a desire to live in the moment, and in extreme circumstances as an excuse for bad or risky behavior.

It sounds alluring until you look at the data about retirement-readiness. According to the 2018 Retirement Savings survey, 42 percent of Americans have less than $10,000 saved. That means an alarmingly high number of people will go broke and outlive their money. It is evident that a YOLO approach to life gets complicated when it comes to money.

Even though nobody is promised tomorrow, at the same time nobody wants to live out their retirement years with little money and limited choices. How can you strike a successful balance?

Here are four quick tips.

Understand Your Cash Flow

This is simple but extremely important. As we saw in Inspired Money episode 27 with FIRE (Financial Independence and Early Retirement) couple Tim and Amy Rutherford, reducing your spending can have a huge impact on when and how you retire. Understanding your spending patterns are key.

Set Your Spending Priorities

Clarifying your short and long term goals will help you stay focused on the ultimate outcome. Maybe you like traveling so you'll be more willing to give up eating out in order to save up the money for a big trip every year. Know your larger purpose.

Automate Your Savings

If you get paid by direct deposit, it’s easy to direct funds into multiple accounts. Set up a basic emergency fund, and once that is funded, set up multiple accounts to have balances grow for specific goals (retirement, a trip, perhaps new car). This allows you to see the progress you’re making. If you can save money automatically before it reaches your bank account, you’re more likely to continue saving those funds in the future and even to increase your contributions over time.

Plan for Spontaneity

Perfection is impossible so you are not expected to be perfect. Setting aside money specifically for spontaneous spending and splurges with help you stay on track. This is the compromise that allows you to live and spend in the moment.

You may on occasion treat yourself by living in the moment, posting to Instagram with the hashtag YOLO. Just don't overdo it at the expense of your retirement and savings accounts.

What do you think about living in the moment vs. planning for your future? Let us know if you're doing well or poorly by leaving a comment below.

“Bungee Jump – Interlaken, Switzerland” by Alan Light is licensed under CC BY 2.0