Which Comes First?

By Kevin Gibbons

The foremost tenet of The Savvy Life is To Save on the Things that are not as Important to You so You can Spend on those Things that are Important. But how do you balance your income and your expenses?

Do you lead the life you can afford, or do you strive to afford the life you want to lead?

For most of us, this is not an “either-or” question but a balancing along a spectrum. But let’s take a look at the ends of the “teeter-totter” to see what we are talking about. Some people value peace of mind and serenity over traditional elements of success. For them, leading a simple life that others may consider austere, is much preferred over working the rat race to fund a more complicated lifestyle.

Other people fall into the “work hard and play hard” camp, where working long hours, advancing up the corporate ladder and being able to afford luxury vacations, accommodations and surroundings is their greatest pleasure. So, are the latter stooges of the consumer society while the former are unambitious squanderers of their talent, with no drive to better themselves or the world? Hardly! It’s just a question of where on the spectrum you are most comfortable.

If you value a life with few possessions and simpler, nature-driven experiences over a more complex one, then why should you work to earn more money than you need to be happy and as secure as you feel necessary for your future? You will be leading the life that you can afford and be quite happy. On the other hand, if there are specific things, experiences, and associations that define success and happiness for you, why wouldn’t you work to achieve at least some of those? For you, working to afford the life you want to lead makes perfect sense. One size most definitely does not fit all.

What can you do regarding your own situation? Where do you fall in this spectrum? The most important thing to do is take the time to determine, for yourself and your family, where you fit on the “lead the life you can afford” vs “work to afford the life you want to lead” line. Be purposeful in making your decisions. Don’t give up on pursuing a lifestyle you really want because you cannot afford it right now. Don’t chase after things and experiences that won’t make you happy just because someone says you should have them. Stop and consider why you are making the decisions you are making and do those decisions support your ultimate lifestyle goal?

Melissa Tosetti, Founder and CEO of The Savvy Life, is fond of saying that we and our friends “can have fun in a paper bag.” What she means is that, while our group does enjoy some of the finer things in life, and likes sharing some elaborate experiences, we also take great pleasure in being together and often enjoy ourselves in creative ways while spending very little money. Many of our friends have expensive tastes and hobbies, and we all like to indulge where we can afford to and get the most reward. But we try to look at what we will get for our investment, and if the pleasure does not justify the expense, we have no problem saying “no.” Likewise, for every fancy dinner or vacation trip, our group gets just as much enjoyment from an evening of socializing at someone’s house, camping or just being silly with each other. The key is not making an absolute decision one way or the other, but being open to evaluating every experience and life choice in light of how it fits with your intent on how you want to lead your life and on weighing each opportunity to make sure it is worth it in your eyes.

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Kevin Gibbons is a Cash Flow Planning Expert, the Vice President of The Savvy Life and co-author of the international bestseller Living The Savvy Life. For the past eight years, Kevin and Savvy Life Founder Melissa Tosetti have worked with over 545 individuals and families to create Spending Plans.

They also work with financial advisors and their clients doing cash flow planning as well as giving Savvy Living presentations via webinar and in-person to audiences across the U.S.

To learn more about how Kevin and Melissa work with clients, visit The Savvy Life’s Programs Page.

If you’d like to learn more about how they work with financial advisors and their clients visit: The Savvy Life Advisor’s Page