09 Feb

Does Your Lifestyle Cost More than You Earn?


If you are spending more money than you earn (called living a champagne lifestyle on a beer budget) you’re heading down a slippery slope and it only leads to one place, Financial Disasterville!

There are several reasons why you might prefer the expensive taste of champagne over the less expensive beer life.  Here are 5 reasons why you might be finding it hard to give up the champagne lifestyle:

1.  It’s very easy to get credit and it enables you to buy things you otherwise couldn’t really afford.

When you whip out our credit card and say, “I’ll take it!” you get a double hit of dopamine;  the pleasure having the purchase now without the pain of paying with the folding stuff – you just gave them a piece of plastic.  How easy was that!  Of course, you have great intentions of paying off the credit card in full, but that never quite happens.  There’s more credit in that card and minimum payments enable you to keep fooling yourself that everything is fine.AS

2.  Keeping up with the Joneses.

You couldn’t possibly let your friends and family think you’re not doing as well as it looks.  Friends are off on an overseas jaunt so of course you have to go.  If you didn’t go what on earth would they think, besides, you don’t want to be left behind.  You have a fantastic time away, then reality hits when you’re back and wonder how on earth you’re going to pay for it.

3.  You feel a sense of entitlement.

“Why can’t I have this lifestyle?  I deserve it.”  This attitude was seen with startling clarity in a BBC One documentary Britain’s SpendingSecrets.  It featured a single mother living on benefits who couldn’t understand why she couldn’t have the celebrity lifestyle.  So, it was no surprise that she got herself seriously into the debt mire trying to achieve it.

4.  You can’t distinguish your needs from your wants, so everything becomes a need.

This attitude becomes abundantly clear on big sale days like Black Friday, where the shop floor becomes a battle ground for people squabbling over sale items.  Whereas, in all reality, you probably don’t really need it at all.

5.  Maybe you don’t know you’re living a champagne lifestyle on a beer budget.

Sounds a little flaky, but it does happen.  If you are in a relationship where you have completely abdicated your financial responsibility for the household spend to your partner, and you spend away merrily with no idea of the consequences.

What can you do if you see yourself in any of these scenarios and you’re worried?

You need to give yourself a reality check right away.  Find out what your lifestyle really costing you and whether you really afford to live it.  If the answer is no, then definitely STOP!

Financial issues/stress are responsible for the majority of relationship break-ups in the western world.  Work performance suffers and stress-related illnesses can easily develop.

This lifestyle you’ve built is imaginary, it isn’t going to make you happy or stop you losing your car or house.  If you’re at that point, you can’t keep playing the game anymore.

A successful lifestyle isn’t just about money.  There are other important parts of success like family, your personal achievements, happiness and feeling good about yourself.

Here’s a phrase we use, “don’t keep up with the Joneses, they’re probably broke or living on plastic.”

If you want a real life look at people doing the champagne/beer lifestyle thing, there’s an article in JUNO Investing magazine, called The $70,000 Millionaires!

Get advice from someone who can help you manage your money and also work with you to understand why you were living a lifestyle outside of your means in the first place!

If you have any questions around this or you would like to discover how you can change the way you think about your money, then drop me an email or click on this link to find a day and time that suits you to have a chat with us.  Best of all – it’s free!