83: Adulting 101 Series: Life

You’ve heard us talk about housing. You’ve heard us talk about transportation. Now, we’re talking about life. Not like the heavy “What is life?” stuff… just the money side of it. Do you know how much you spend on “life,” i.e. dining out, clothing, Netflix and chill sessions, vacations, etc.? Do you ever wonder if you should really be spending that much money on yourself? You’re not alone. That’s why, on this episode of Worth It, we’re talking about the “life” category of your spending: how much you should be spending… and how much you should be saving. 

 

WHAT YOU’LL LEARN

• [00:41] What is included in the “life” category of your expenses

• [03:41] Why it’s so easy to spend more as you earn more 

• [05:20 The concept of business longevity 

• [06:42] What’s happening in our generation when it comes to saving/spending

• [07:36] What the Law of Attraction has to do with your finances

• [09:18] How abundance and scarcity mindset affects your “life” spending

• [10:23] The risk of “abundance mindset” as it relates to overspending

• [12:13] Whether you have a “wealth mindset” or a “money mindset”

• [12:51] Why wealth-minded people aren’t afraid of running out of money 

• [13:52] How to create a wealth mindset

• [15:02] What the BULB process is 

• [15:14] How much you can spend (after saving)

 

THE IMPORTANCE OF LIVING WITHIN YOUR MEANS

Before we dive into how much you should be spending on “life,” we want to talk about what’s actually driving you to spend. As successful biz owners and entrepreneurs, we know you’re #killingit, but that can also mean you’re tempted to get it while the gettin’ is good. That means more trips, more shopping sprees, and more “Sure, I’ll loan you that money for your startup!” All of that is great, and has its place… but only if you’re saving and investing what you need to create long-term wealth and stability.

That’s why the first thing we talk about in this episode is considering your relationship with spending now so that you can have wealth in the future. Are you saving (and giving) 25% of your income? Do you have a Backup Life Bank like we talked about in Episode 63?

 

Remember: Your Backup Life Bank is 25x your minimum income requirement. If you need to make $80,000 a year to get by, you’ll need about $2 million in your BULB.

 

Of course, we’re not saying you have to set aside 25% of your income AND have $2 million in the bank before you can have any fun. We’re just saying the amount of money you can reasonably spend on “life” is subject to how much you’re really setting aside.

Once you’ve started saving a quarter of your income and are working toward your BULB, what you spend on life is up to you (within your means, of course). That’s why we also talked about your mindset… because that really affects how much you’re spending and saving. Plus it’s, like, totally #adulting.

 

How to create a wealth mindset

As adults, we have to do a few things we’re not super excited about. Like floss every night and clean the kitchen. We also have to spend money on things that don’t “spark joy,” as Marie Kondo says. So no, we can’t just spend all our money on avocado toast and Teslas. We also need to consider our future, our businesses, and what we’ll do if things don’t always go as well as they’re going right now.

That’s why we talk a lot about mindset on this episode. Because, once you have the saving thing down, you can spend as much as you (reasonably) want. But how do you know you’re spending on “life” in the right ways? You spend in alignment with your values, visions, and goals for your life and money. 

Sounds easier said than done, right? In this episode, we talk about how to embrace a wealth mindset (rather than a spending mindset) and even offer one of our tools to help you get there. Use our Vision Worksheet to figure out if your life’s expenses align with your true values, visions, and goals — and to get clear on what you want your money to do for you, so you’re not spending in areas that make you go “Why the heck did I buy that?!”

 

A FINAL NOTE

This episode isn’t about telling you what you can and cannot spend your money on. However, we are firm believers that you should be spending well within your means. If you’re not reaching that 25% savings goal, nor have you started your BULB, those should be goals of yours before you start spending more of your hard-earned cash. Until then, live within your means and really think about what’s important to you. Sure that trip or designer bag sounds great now, but is it really more important than security and wealth in the future?

If you’re wondering how much you should be saving, spending, or putting in your “backup life bank,” this is the episode for you. And if you’re wondering how to manage the money so you can spend, save, and do all the things, you can always contact Toujours Planning to see if our financial planning services are a good fit for you.

 

This material is for general information only and is not intended to provide specific advice or recommendations for any individual.

 

RESOURCES & PEOPLE MENTIONED

• Episode 63: Self-Employment + Retirement: Work-Optional Lifestyles
• Vision Worksheet inside our Resource Vault
• The Toujours Planning Quiz — are we a good fit for your financial planning needs?

 

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