How To Start Living On Your Terms
Yeah, I hate that advice. I know the point is to show that small amounts add up, but really, why pick on coffee? I mean, what about tea!?
What’s rarely said, is that you need to figure out what changes you can make to your spending habits that will help you live life on your terms. And unfortunately one of the Secrets of Adulthood that I’ve learnt is you have to compromise if you want to get to where you want to go.
Really, this applies to everything in life – relationships, weight, time management, wanting to own a horse but loving to travel.
To figure out how to get from A to B you need to have a financial plan. To actually execute that financial plan, you have to know what you are and aren’t prepared to do. If you’re not prepared to give up coffee and that’s your $3.50 a day savings plan, then you probably won’t even try to get to B for more than a day or two. In any case, detoxing from coffee is nasty!
But if you look at your priorities, what’s actually important to you, you can figure out what you need to do to get to B, not what the coffee hating financial planner recommends.
The Secret to Achieving Your Goals and Living Life On Your Terms
Ultimately, we all have finite financial resources (or time or metabolic) and we need to decide where we should spend those. What decisions do you need to make in order to have the financial life you desire?
About 10 years ago, shortly after getting a huge home loan – or at least what seemed like it at the time – we decided our goal was financial independence.
The feeling that our bank would force us to work until we were positively ancient made us very determined to pay that thing back. We’d be financially independent, when the loan was paid off, right? Well, not quite but that’s a different story.
But deciding what spending was really important and made our lives worth living versus the stuff that we were prepared to do without – even when all our friends were doing it – has made the difference between feeling rich and feeling like we never have enough.
The things we never skimp on? We travel, a lot; we own a vast array of technical hiking and kayaking gear; I go to weekly yoga classes; buy comfortable (read: expensive) footwear; we regularly go to theatre/comedy/music shows and go all out by buying avocado for weekend breakfasts…sometimes!
The casualties? We own a CRT TV, still, and it’s a hand me down. My Lululemon wardrobe has not expanded beyond a headband. We make our own pizza on Friday night instead of buying takeaway. At the movies or show, we don’t buy intermission drinks or popcorn. We love $1 Tuesday DVDs and are thankful we still have a local video shop.
What’s Good For Someone Else Isn’t Always Good For You
My inner toddler starts to whine that it’s NOT FAIR.
And it’s not really, because compromise is never fun especially when it looks like you’re the only one doing it. It’s like in primary school when your friends had packets of chips for lunch and you had a squashed pear. Yes, I’m still bitter about that!
So yes, I regularly have to soothe my inner toddler. Each time I remind her exactly the same thing my mother repeated during my childhood – what’s good for them isn’t necessarily good for me. And so far, that’s worked up pretty well for me.
*Actually this isn’t true. If you are 30 and buy a coffee each work day for 35 years, you could save $124,000 (not accounting for inflation of coffee prices), at an interest rate of 7%. Which will probably be enough to buy a coffee in 2050. In case you are interested, to be a millionaire in 2050, you would need to save and invest around $550 per month for the next 35 years assuming a rate of return of 7%. Check out the Savings Goal Calculator by ASIC for lots of fun.
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