What drives you to choose personal finance over enjoyment in life?
There is a particular impulse that flows naturally. That impulse is enjoyment in life and often happens, most especially when you have just earned money from your business or job. That urge gets higher when the money comes from bonuses or gifts.
But, to grow or expand and still be able to take care of yourself when you retire, you have to focus more on your personal finance. Mind you, enjoyment in life depends on how you indulge in things that make you happy. It has to do with the kind of lifestyle you live.
Studies have shown that delayed gratification is the unique skill and power you need to achieve everything life has in store for you. Your overall life and health lead to a lower likelihood of obesity, better responses to stress, better social skills, and lower possibilities of substance abuse.
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So even as focusing on personal finance over enjoyment in life, might be a bit challenging at the start, harnessing the powers of delayed gratification will help you achieve more. So how do you do that? By simply finding a way to strike a balance between enjoyment and managing your finances. In this post, you will see why you should focus on personal finance over enjoyment in life and actionable solutions that can help.
Why focus on personal finance over enjoyment?
Personal finance is the practice of prudent managing your money, saving, and making investments. Besides, personal finance affects many areas of your life, from banking, mortgages, insurance, retirement planning, budgeting, tax, and estate planning.
These are serious areas of your life that require much focus. Hence harnessing personal finance needs your utmost attention.
Personal finance also governs the approach to achieving your financial obligations and goals, be it saving for your kids’ education, having sufficient money to begin a startup business, or even saving for retirement. All these depend on your income, how you spend, and your enjoyment in life. Building a plan is, therefore, necessary to accomplish all your financial goals within your financial strength.
A strong focus on personal finance would help you direct your energy and apply your knowledge to your finances to stabilize your income and grow it. This will help you move from living from one paycheck to the next, rather than just staying alive.
How to balance personal finance and enjoyment in life
1. Analyze your present state
To analyze your present state, you should scrutinize or go through your current state of living. You can start by creating a list of questions to ask yourself. This test might appear easy, but it is very effective and is known as the “happiness barometer.” Some examples of questions you could create for yourself includes:
- Am I enjoying life?
- Is this where I want to live?
- Am I excited about my current lifestyle?
- Is this my dream car that I am driving? And if not, what am I supposed to do?
- Are my finances adequate to fuel my present lifestyle?
- What are the things are ought to do but haven’t commenced doing?
- And so on.
Furthermore, go through the questions thoroughly. Then after that, check out your finances and introduce questions to your list, like:
- Have I been paying my bills when due?
- Do I have disposable income? If yes, is it sufficient?
- Am I saving adequately for my retirement?
If most of your answers are “no,” then most of your goals need to be reevaluated, adjust your lifestyle, or do the two. Meanwhile, while working on your goals, concentrate more on your “needs in life” rather than your “wants in life.”
As you focus on personal finance, ask yourself this question: Am I happy with how I handle my finances and the current lifestyle I live? If your answer is negative, develop a new lifestyle and retirement plan that suits your financial strength. Then set up a plan to ensure that your goals match up. Besides, endeavor to check and update your plan every three months.
2. Create new goals
Take a look at your lifestyle and retirement goals; if they don’t align, you need to go back to the drawing board and either edit your existing goals or create new ones. At this point, you will have to differentiate your “wants” from your “needs.” Then, don’t just set goals based on vain wishes. Ensure that your goals this time circle around your financial strength or resources.
You can begin with your lifestyle goals. Start by forming a list of those things you desire to do. That is, things that can make your life more exciting and pleasurable, such as places you desire to visit, hobbies you will love to develop, the kind of car you will love to drive, the dream home you will want to live in, restaurants you would want to try, charities you might want to give support to, and all other things that have to do with enjoyment in life or that makes you happy.
Then bring out your retirement goals, and check if they tally with your anticipated financial objectives and needs. You must review your budget and make the necessary adjustments if they don’t.
But, if you don’t have any retirement goals, this will be an excellent time to create them. If you have issues with creating retirement goals, you can consult an expert.
3. Create a plan
Immediately, you have listed your lifestyle goals and have your retirement goals ready; the next thing is to evaluate if they can align. Then put both your lifestyle goals and retirement goals into your budget, attaching dollar figures for each of your lifestyle goals. At this point, if you notice anything that is not necessary, then you can remove it.
Your retirement goals are vital and will not need to be compromised. Rather than adjusting your retirement goals, it will be preferable for you to let go of things that are not too important in your budget. For instance, you might want to play polo at least once every month. But, if you do not have enough finances to allow you to enjoy your hobby, then don’t bother removing it. Instead, take a critical look at your budget, and find other areas through which you can fund your hobby.
Review each lifestyle goal and find out the sensitive things you will be required to adjust in your budget to achieve your goal. The purpose of this review is for your budget to work for you and not for you to work for your budget.
4. Consider Nerdwallet’s 50:30:20 Principle
If you are currently dealing with debt or struggling with making your paycheck work for you, then you need a strategy that works. Nerdwalet budget calculator helps you divide your take-home income to suggest spending in full detail. The 50/30/20 works significantly well if your income currently fluctuates; you can easily use it at any stage. It is all about using 50% of your income for your major expenses, including rent (or saving for rent), food, and transport, while 30% goes for your enjoyment and 20% is strictly for saving. You can also consider automating your savings to avoid all kinds of temptations. Simply visit the Nerdwallet budget calculator to check out everything on this principle.
4. Frequently observe and reevaluate
Once you have set up your plan and started functioning, do not just sit and fold your hands, expecting your plans to run automatically. You have to check if your plan is frequently working. It will be good if this check is carried out at least once every three months.
Apart from frequently observing your plan, you must also reevaluate your goals, objectives, and budget. The reevaluation is crucial because it helps you to know if any changes are necessary, and it should be done a minimum of once every year. Although, if you are not meeting your objectives and goals, more regular observation and reevaluation will be required.
Ensure you find out what went well and what didn’t, then make every necessary adjustment. This is a unique and practical process. You will notice several changes to your lifestyle and retirement goals. Always be eager to adjust, and think twice before letting go of your essential goals. Never be weary of pursuing your desired goals; instead, consistently go after them.
Why focus on personal finance over enjoyment in life? You must practice personal finance to effectively enjoy your life sustainability without going from the top to the bottom quickly. No matter how much you make, you can’t let the thrill of spending control you.
If you want to enjoy a good life when you retire, you must set up a plan. This plan will help you focus on your finances.
Focusing on personal finance over enjoyment has so many advantages. By staying committed to the financial goals and objectives you set for yourself, you will begin to see remarkable changes. Besides, you will be content that you will live a happier and more comfortable life when you retire.
Hope this post has been helpful. Please, do well to live your thoughts in the comment section. Thank you.