It's a common thought in the financial planning industry that saving money requires making sacrifices. Prevailing thought dictates that you must either sacrifice your future for your present or you must sacrifice the present for your future. But, is any sacrifice necessary?

Consider the ideas underlying both approaches to financial planning: Sacrifice. You are asked, either implicitly or explicitly, to give up your values in order to achieve other-perceived-values. Now, sometimes, you will be faced with making priorities and choosing between what values are more important to you. This isn't sacrifice. This is establishing what's truly important and significant in your life and what isn't. You make a trade, but you never give up a greater value for a lesser value or no value at all.

But, many times, you are asked to make unnecessary choices (a choice of false alternatives) under the pretense that you are setting priorities. This is often disguised through the use of qualified retirement plans which separate your retirement savings from all of your other savings. The retirement savings account serves as a "special savings" which should never be touched except in the event of emergencies. Penalties are imposed for using this money prior to a certain age. Furthermore, you're often told that you should establish a separate emergency fund and then have yet another savings separate from the two previous savings so that you can go on vacation or buy big ticket items.

By separating out your savings like this, you end up creating a situation where you're forced to make sacrifices. You must keep all savings separate, yet somehow achieve all of your goals and pursue all of your values. Yet, at the same time, you only make so much money. It would be much easier to use part of your retirement savings when you want to purchase something and then repay this money with interest. But, you are told, you should have a savings separate from your retirement savings for vacations and other big ticket items. What happens when you cannot afford to put money away for a vacation you've been wanting to take because it would mean taking money away from your retirement savings? You're told you must "make sacrifices" or "tough choices."

Budgeting is another area of financial planning where sacrifice is seen as the norm. Arbitrary dollar amounts are set for expense items like groceries or gasoline or cell phone bills. Then, your values (i.e. the type of food you like to eat) are supposed to accommodate an arbitrary limit. Instead of establishing your diet, and then building a budget to accommodate it, you are often asked to cut out your morning cup of coffee or buy generic brands or stop eating out on Thursday nights.

Financial planning should never require you to make sacrifices. A financial plan should never ask you to compromise your values. It should be the tool to help you achieve them. The alternative to sacrificing your future for the present or the present for your future is to establish what your values are, then prioritize those values, then build a budget around those values. If you fall short, financially, then you have to reassess the priority of your values or create more money to accommodate your values. When it's all said and done, you'll have everything you really ever wanted and you won't feel like you've given up anything important or significant.

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