savingPersonal finance decisions are actually pretty simple. We already know that we should be saving money every month. We know that we shouldn’t be eating out as much as we do. We know that we could probably drive a less expensive vehicle. And we (I) know that it isn’t necessary to have top-shelf bourbon in a perfect Manhattan, since it’s all in the vermouth anyway.

We know. So why don’t we do?

Because we don’t have a bulletproof “why.” When we are sitting in front of the bartender, the immediate gratification of that fancy drink overwhelms the future benefit of saving a few extra bucks for retirement someday. The only reason we will choose to stop spending so much now is if we have a compelling why for saving.

Let’s say you are saving for the down payment on a first home. If you can picture yourself living in your own place, hosting Thanksgiving for your family in your own dining room, celebrating your kid’s birthdays in your own back yard, etc., that new home will be more attractive than whatever you were going to spend money on in the short-term. The more focused you are on why you are saving, the more powerful the pull to save.

Life is about tradeoffs. Every penny you spend now is a penny you can’t spend later, so spend money on what is most important to you – not just what is most immediate.

This can be tough when you’re 25. Although 25 year-olds are in the best position to reap the maximum time benefit from investing today for tomorrow’s retirement, when you are 25 it is virtually impossible to imagine yourself as an 80 year-old retiree with a walker who relies on your investment income. Nonetheless, we will all be there soon enough. And, when we are, we will need an income stream.

So, imagine your body not being able to function the way it once did. Imagine not being able to earn an income. Imagine needing to pay someone to drive you, dress you, or feed you, because that is the likely scenario for most of us. That’s the why for saving as much as you can for as long as you can. And if you can’t imagine, try the iPhone app called AgingBooth, which uses a graphic algorithm to age your picture 30 years.

I tried it. Although I won’t know for 30 years whether or not it exaggerates the depth of my future wrinkles or the portliness of my cheeks, it certainly painted a vivid picture of what I might look like at 75. It helped me imagine the person who will be relying on the money that I am saving right now for retirement. He looks a lot like me. Just older. I know if I look at that picture once a week, I won’t forget why I need to save even more.

You already know what to do, but you can’t force good financial behavior. Instead, try to picture the things you are saving for and the reasons you are saving. If you can make them real, they will be far more compelling than anything the bartender’s offering.