Balancing your budget seems like a simple task. Just spend less than you earn, right? If you’ve ever wondered why such a simple task can become so complicated, it’s because optimising your financial life involves a fair bit of time travel.
There are a couple of scenes in Back to the Future III where Doc has to explain to Marty why thinking fourth-dimensionally is important for their plan. Sure, in 1885 the bridge they accelerate towards doesn’t exist, but when they get to 1985 it will be there and they can drive safely across. Marty saw the world as it was, but Doc saw the world as it will be.
As personal finance writer Matt Levine explains, many personal finance principles boil down to this same basic time travel idea. Being able to view your money not just in terms of how much you have now, but how much you will have in the future is critical to balancing your budget:
The essence of finance is time travel. Saving is about moving resources from the present into the future; financing is about moving resources from the future back into the present.
When you save money from your current salary, you’re building the metaphorical bridge that your future Delorean can cross. When you borrow money on a credit card, you’re taking money out of the pocket of your future self. Sometimes real life makes decisions complicated, but if you can start thinking about your money fourth-dimensionally, you can make your future a good one.