Budgets are boring–and feel restrictive. It’s no wonder that the average American rebels with a “forget that” and overspends anyway. It’s like going on a diet: They never work in the long run because they make us feel like we’re missing out on a lot of the good stuff.
How Do You Want to Live?
I would like to propose a much friendlier “lifestyle plan.” This plan gives you a holistic approach to your relationship with money. It also incorporates your hopes and dreams. After all, we can stick to a budget until our bodies give out but will that really make us happy? Without really thinking about how we want to live our lives, we will still feel a sense of failure and loss.
Below are some questions to get you started; dig deep to come up with your answers. (If you’re married, I highly recommend going over these questions with your spouse.) Write them down so you don’t forget:
- If you could live anywhere in the world, where would you live? Why?
- If you had the choice of indefinitely living in a home, a luxury condo, a cruise ship, a cabin or a hotel, which one would you pick (assuming each of these living spaces were of equal size and quality)?
- If you could only choose one, is it more important for you to have a nice space to live in or to do things that are interesting to you?
- If you could get paid a lot of money to do anything, what would it be?
- What are some things that you regularly spend your money on that you could live without or cut back on?
- What are some less expensive alternatives to some of the items you regularly spend money on? Look at everything, including reoccurring bills such as cable, cell service, mortgage/rent, food etc.
- Who would you like to spend more time with and what would you like to do with them?
- What do you wish you could fix in your life and would having more money fix it?
Now that you have answered those questions, look at your answers. This is going to give you an outline of your lifestyle plan. Knowing what you like and want to change in your life gives you an idea of where you want to go, which is key. If you don’t know where you want to go, you can’t ever get there.
The point of the questions is to give you a vision for what can be your future. And if you want that future, you have to prioritize and focus your spending. You can’t buy everything. It’s better that, when you do spend, it’s on things and people that really matter to you.
For example, if you’re the type of person who loves to travel and be on the go then why are you spending money on cable? Or if you wish you could spend more time with your kids then why are they involved in so many after-school activities?
Sometimes we go through the motions or do “what everyone else is doing” without really thinking about if it reflects what truly matters to us. Unless you’re a billionaire, you have to prioritize what you’re spending your money on.
How To Implement Your Plan
Now that you have a vision of what your dream life would look like, you can implement it by taking the following steps:
1–Use Selective Spending To Get More Of What You Want
I have this theory that many people overspend because they’re unhappy, and they’re unhappy because they feel that their hopes and dreams have been buried under a heap of bills and other responsibilities.
In order to execute your lifestyle plan, you’ll need to be selective on what you spend your money on. You can’t buy everything, even if you become wealthy. You have to choose. When you buy something, whether it’s food, clothes, experiences or something big like a car, it should only buy what you love. If you buy on impulse or because something is on sale, you end up wasting money on things that you don’t even really value.
You also end up wasting time. Buying takes effort. So does managing all of that “stuff.” Your money–and your time–should only go towards the people, experiences and things that fit in with the vision you have for you life.
And at the end of the day, you have to make sure it’s your vision–not what your friends, family or society in general thinks you should do or own. Too many people live their lives on other people’s terms.
Part of these “terms” is buying to try to make ourselves look worthy in other people’s eyes and I discuss this further in my article Stop Spending Money to Impress People (And Get Rich Instead). For example, if you buy a big house you can barely afford just to impress others and it leaves little money for a hobby that’s really important to you and feeds your soul, then you’re going to gradually wilt inside over time.
Replace this desire to impress with the vision of your dream life. If you have the goal of creating the life you’ve always dreamed of, you’ll become more intentional when it comes to spending. You won’t want to spend money on things you really don’t need because you’ll know that the money would be better spent creating your dream life.
That cost cutting can come in many different shapes and sizes. Maybe you cut back on eating at restaurants so you can pay for the classes that will help you finally get your dream job. Maybe you decide to sell your house because you’re spending too much time on maintaining it and not enough time with the people you love.
Check out How Selective Spending Increases Your Net Worth to learn more about how to put your money towards your life’s dreams instead of wasting it frivolously.
2-Turn Your Passion Into a Career
No lifestyle plan would be complete without having the career of your dreams. Most of us spend a lot of time working and if you hate your job, it affects everything–your health, relationships and overall happiness.
How did you answer the question above: If you could get paid a lot of money to do anything, what would it be? Are you currently doing that as your job? If you’re not, you should be.
You can do what you love and earn a good living doing it, as I outline in 5 Steps to a More Exciting and Lucrative Career. By taking a few courses and doing something like writing a blog (like I’m doing), starting a YouTube channel or even just having a Facebook Group, you can change your life’s work in as little as a few month. If you feel stuck in your current career, I recommend checking out that article.
How to Launch Your Dream Business can also help figure out what your passions are, how to brainstorm to come up with the best business to launch based on your passion, finding your business’s purpose, what costs to consider when coming up with a business plan and how to launch on a tight budget.
3-Invest in Your Future
There are two ways to invest for your future: One is to put your money into an investment vehicle like stocks, bonds or real estate with the intention of getting a return so your money can grow.
While you can earn money in real estate and bonds, my favorite is dividend stocks. I prefer dividend stocks over any other type of investment because, if you buy the right ones, they are stable and pay you even in a down market.
If you want to learn more about dividend stocks, check out my article Why Everyone Should Own Dividend Stocks (A Simple Guide).
The other type of investment is in your education and expertise so you can earn more. Once you have figured out your passion and have begun the process of heading down your new career path, you have to dedicate yourself to continuing to learn. Every type of industry is “fluid,” meaning it’s always changing, often in imperceivable ways.
To earn the most money, you must invest in your continuing education, whether that’s formal training or just taking the time to watch some YouTube videos by the top people in your industry.
Protect Your Dreams
Life can go so fast. One moment we’re in our twenties, feeling invincible and like we’re taking on the world, and the next we’re middle-aged and scratching our protruding bellies.
No matter what your age, always protect your dreams and go after them. I encourage you to make a plan for yourself that fully includes your deepest desires. The last thing I want is for you to have regrets later on.
The beauty of the lifestyle plan is that it’s not just facts and figures; it’s about what matters the most to you—your wants, desires and dreams–and no cookie cutter budget can give you that:)