In our everyday lives, we make choices. Choices include the type of work we do, where we live, the car we drive, where we vacation and where we shop. We make so many choices! Are those lifestyle choices consistent with one we can afford? There are signs that our lifestyle may be better suited for someone else, one with more resources. Financial stress is one sign. The inability to save is another sign. Lack of awareness of income and expenses, is yet another sign. These signs give us a warning, to pause and focus. How do we know if our lifestyle really fits our income and is financially healthy?
Do you feel financial stresses? This is a common emotion, where some aspect of our financial lives is on our mind. If you live paycheck to paycheck, that is often a source of financial stress. If finances are a contentious topic in your household, that is a stressor. If bills are mounting, and you are unsure how to prioritize paying down debt, you will feel stressed. If you have spending obligations coming up soon, with no clear plan for funding those goals, you may feel stressed. Mounting levels of stress can be a sign that your lifestyle is not consistent with your income.
If you are unable to pay off your credit cards in full every month, you may be overspending. If you are spending more than you earn, then you may be living someone else’s lifestyle! Try reducing expenses, so that you spend less than you earn. This will take your time and attention, but it can lead you to a healthier lifestyle.
Are you able to save appropriate amounts for your goals and retirement? Depending on your age and stage in life, you may need to save for a down payment for a home, a child’s college education, or your own retirement. If you have not yet focused on these goals, consider starting now. Retirement should be a top priority. As stated in a recent article by Samiha Khanna in the Journal of Accountancy, “many Americans are uncertain about their preparedness for retirement – and they’re worried about it. In a recent survey, 42% of respondents said their lack of confidence in their ability to retire was causing them anxiety.” If you are unable to save for retirement and other goals, you may be living a lifestyle that is better suited for someone with more income.
If you are unaware of your financial picture, that can be stressful. Sometimes, we just need to get a handle on our finances. Often, we really are more comfortable when driving a car that suits us in a lane where we feel safe.
To learn if your lifestyle is appropriate for you, begin with documenting your income and expenses. Keeping track of income and expenses can give you a feeling of greater control, and can also jump start an action plan. If it is too difficult to review past bank and credit card statements, use an expense tracker app. Mint is a good app for tracking expenses. In a recent Wall Street Journal article entitled “How to Use a Phone to Spend Less and Save,” Anne Tergesen wrote “to keep from overspending, download a budgeting app like Qapital or Digit, which can sync to a bank account.” There are at least three good apps for expense tracking!*
After a spending analysis, you may find you are living the lifestyle of someone with more income. That is, you are spending more than your income. If that is the case, consider increasing your income by training for another job or taking on a second job or decreasing your expenses. Living only your lifestyle is the right road to decreasing both financial and interpersonal stress.
