…instead, why not financially plan for the lifestyle that you want, not the one your neighbours have?
The saying “keeping up with the Jones'” has been around a long time. I don’t know about you but I personally don’t care about what other people have or where they have travelled to as far as being jealous or trying to compete. I enjoy listening to people tell stories about good times they have had and what memories they have made. But I’m not thinking, gee they went to New York so perhaps we should go to New York. They drive a Mercedes so maybe we should think about upgrading the Ford to a Mercedes or a BMW.
Honestly you are better off channelling that energy establishing what is important to you and then think about what you need to do financially to achieve your ideal lifestyle. This is where the term lifestyle financial planning comes from and that is at the heart of my business, Essential Financial Advice. So what exactly is it?
Thinking about the lifestyle you want to live is where it begins So for example, in my ideal lifestyle I want to come home to open space where kids can run freely and be as noisy as they like. I want to see trees and the calming river. I would prefer to drive a car that feels powerful and has a luxurious interior because it suits my aesthetic taste.
I want a kitchen that is big enough to cook for my family and bake cakes with my children without us getting in each other’s way (and maybe fits two ovens!). I would like to work less so that I can have more time to enjoy life. Every 2 years I would like to spend a week somewhere relaxing with my family. I love teaching yoga so I would like to be able to have my own yoga studio (not me… this is an example).
So you start by visualising the lifestyle you want – by no means does it have to involve buying things, it’s more about the way you feel. Next is to work on a financial plan to get from where you are now to that ideal lifestyle.
For instance, your plan may involve paying down debt to allow you to have more cash flow once the debt is gone. Budgeting by design as opposed to just living to your current pay cheque. You might need more income to bring your lifestyle to fruition. Do you need to work more, get a higher paying job, invest in yourself through education and training to make yourself more valuable and therefore increase your income over time? You always have choices when it comes to budget by design. It’s about making the right choices for your situation and vision.
My husband and I laugh at our personal choices because we have a penchant for nice cars. But we have never, ever bought a good dinner set, cutlery, pots, glassware etc. We have been together for 15 years. We have a very limited wardrobe and shoe collection, we don’t do big expensive holidays (we usually go on road trips with the camper trailer). We eat basic and inexpensive food most of the time. These things aren’t of great importance to us so what we don’t spend on these things can go towards what brings us joy (to use the Marie Kondo terminology).
The lifestyle financial plan is not about hocking yourself to the eyeballs so that you are so financially stressed you don’t enjoy life. It is quite the opposite. It is still most certainly living within your means. It involves thinking financially longer term.
If I don’t know what I want my life to look like in 5 or 10 years time then how do I plan for it? You don’t. How many of you have been treading water for way too long because… money in – money out. It has become a pattern and you never took the time to design your budget around your life’s priorities.
This is a huge factor in my life choices – it influences a great deal of my financial decisions. You can still be spontaneous and take a different pathway to what you had planned, but at least think about it.
You have one life, so make it a good one.
Shonel x
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Unless specifically indicated, the information contained in this blog is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek personal advice from a financial adviser.
Shonel Vuletich is an authorised representative of Synchron, AFS Licence No. 243313.
The Business of Life 