If you are currently struggling with the stress of debt, ask yourself one simple question. Are you spending too much money on the lifestyle that you want, rather than the lifestyle that you have? If you answered yes, then it’s time to get a little wiser about your purchases. Managing your money better will allow you to save money, avoid debt and enjoy your daily life more.

Watch Your Purchases

Many people max out their credit cards purchasing items that they only use occasionally. Have you ever bought new clothes just to wear on your vacation or purchased new, top-of-the line golf clubs, so you can impress your boss once a year? Buying specific products to meet an occasional need can cause a kind of disconnect, leaving you feel dissatisfied, unhappy and downright broke.

The things that you do every day actually matter more than those activities that you only do every once in a while. You would probably be better off not buying any products that represent your fantasy lifestyle. Instead, invest those funds in things you can use in your current lifestyle. If you truly desire an item that you’ll only use occasionally, then consider getting a prepaid card so that you don’t run up a revolving credit card balance.

Shop Smarter

Before buying a new item, ask yourself how many times you think you’ll actually use the item. Then divide the purchase price by that number. The lower your total is, the better the buy.

For example, you might find a great little black designer dress at a fantastic discount, but you know you’ll only wear it a few times. You also spot an attractive cashmere coat at full-price that will keep you toasty through the winter. The coat might have a higher original purchase price, but you know you’ll wear it almost daily during cold weather. The coat, therefore, would have a lower total number and be a better buy because it fits into your current lifestyle.

Live Smarter

You also don’t want to have too much house for your lifestyle. If you have a family of four, do you really need five bedrooms? Only buy the amount of house that you and your family will actually use. Anything more than that and your extra space can cost you a bundle on your home loans, taxes, insurance and utility bills. If you are house rich but lifestyle poor, consider moving to a smaller home.

In summary, start making financial decisions based on the everyday life that you actually live instead of the life that you want. Investing in your everyday lifestyle should save you money while making you feel more fulfilled. Use a prepaid card to purchase any items that you’ll only occasionally use. The prepaid card will help you watch your budget. You should feel less stress because you’ll have less debt.

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9 Responses to Love The Life You’re Living

  1. AverageJoe says:

    I was once calculating a financial decision that didn’t make much sense: moving to a big new house. Our financial situation would barely support it. A mentor told me to ask myself a simple question: “Would I feel good living in a house that was a financial lie?” It made the decision easy. Since then, I’ve used that thinking during countless purchases. “Is this a financial lie?”

  2. I like your formula for determining whether something is a smart purchase. It is definitely true that the daily choices you make will determine the success or failure of your ability to meet your budget.

  3. Deepak Perwani collection says:

    Amazing post and very interesting stuff you got here! I definitely learned a lot from reading through some of your earlier posts as well and decided to drop a comment on this one!

  4. I am going to be totally girly here (you all know I am not; not really) and say that although I can see the advantages of the formula for ‘smart purchase’ it smells of too much rationality for me. It is terribly stressful to have to attend a function and not to have the appropriate dress for it (I am talking work functions and am not too bothered by personal ones). So how many times one wears a smart evening dress? And high heals? Exactly!

  5. Daisy says:

    I agree with the “don’t buy too much for your lifestyle” sentiment. Like people that spend a whole bunch of money on a massive van, but only have one kid. WTF is up with that? Haha. But seriously, good points.

  6. Your post is right on. I’ve definitely purchased clothes for a vacation and then realized there was no need to do that.

  7. I am the trying to not impulse buy….. it is such a rush at the time, but afterwards the guilt sets in. I try to keep that guilt feeling in mind when I am considering a purchase.

  8. It’s a really powerful tool your mind has once you start to question the value of everything you pay for. It’s a new way of thinking for me, but I feel like I’ve become more resourceful and less wasteful.

  9. Interesting formula, I never pay as much attention as I should sometimes. But still, I’m spending way less than I used to, so that’s good. :-)

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