By Kodie Axelsen – Co.Finance
When you hear the word sustainability, what do you think of? Recycling, solar panels, global warming, or perhaps making better choices for the environment? These are generally the things that come to mind, but what about the sustainability of our own lives? More specifically, how financially sustainable is the life you’ve built?
We all want to improve our lives. We want a nice home, a good car, holidays, opportunities for our children and the ability to enjoy the money we work hard to earn. There is nothing wrong with that. But I wonder whether we have become very good at increasing our lifestyle every time we increase our income. We earn more, so we spend more, and before we know it, we have created a life that requires an enormous amount of money simply to maintain.
I find lifestyle creep really interesting. As our income grows, things that were once luxuries somehow become necessities. The house gets bigger, the car gets newer, the holidays become more expensive and our everyday spending increases. Individually, these decisions might not seem significant, but together they can leave very little room financially when something changes.
I believe one of the most important things we can create is a gap between what we earn and what we spend. That gap gives us the ability to save, invest, reduce debt and deal with unexpected expenses. More importantly, over time it gives us choices. Earning more is certainly important, but earning more and spending it all doesn’t necessarily make us wealthier.
We also live in a world that constantly encourages us to have more. Social media shows us the new car, but not the repayments. We see the beautiful house, but not the mortgage. We see the overseas holiday, but not the credit card statement. Comparison can become very expensive if we aren’t careful.
Perhaps financial sustainability isn’t about completely changing the way we live. Maybe it is simply about being more conscious of the choices we make. Keep the car another year. Save a little more. Pay down some debt. Invest when you can. Small decisions made consistently can create significant outcomes over time.
Build wealth, grow your income and enjoy the life you are creating. But make sure the life you build today is one you can afford to keep living tomorrow.
