As we approach the holidays each year, it becomes a
wonderful time to spend with family and friends. It also becomes a time to step
back, count our blessings, and reflect on how fortunate we are. You might also
find that your budget is tighter this time of year, and a little concerned
about how that will impact 2016. Let’s take a moment to quiet those concerns,
and talk about lifestyle ceilings.
Imagine yourself as a high school senior (which may be
painful, depending on how you styled your hair back then), and consider your
options for after graduation. College could’ve been an option, but it wouldn’t
necessarily have been a guarantee. Chances are, the likelihood of entering the
workforce was much higher. Today, it’s pretty much expected that anyone who
wants to attend college can. They might end up with student loans, they might
have to work their way through it, they might even live at home to save costs,
but it’s very much a given.
So what’s changed? We’ve seen an influx in technology,
society has evolved, and the overall lifestyle ceiling has gone up as we
consider things that were once a luxury to now be a necessity. With these
higher expectations and entitlements, it’s important for each of us to decide
how to live within our means.
Take John Doe as an example. He was a school principal
and administrator for the Philadelphia School District, years ago. At a very
young age, every time John received a raise, he added a quarter of it to his
cash flow, and placed the remaining three quarters into his retirement plan. John
set his lifestyle ceiling, and in turn, was able to save for his retirement
throughout the entirety of his life.
The idea of the lifestyle ceiling is to set a limit of
how much you’re going to spend, early in your life. If you can learn to live
within your budget and below your income flows, you not only give yourself the
opportunity to save more money, but you set yourself up for a successful
retirement. Learning to live within your means is an important part of life. Especially
when it comes to retirement, no matter how much money you have, if you can’t
live within your means, you will always have financial problems.
A 2012 study shows that 44%
of lottery winners will spend all of their winnings
within the first five years. You would think with all of that money, saving
would be a top priority, but it seems to be consumed at an even faster rate.
What makes the difference? It’s about personal discipline. One of the first
steps to financial success, besides having a budget, is the self-discipline to
live within your means.
Whether it’s learning to live within your budget,
regulating impulse purchases, or simply learning to appreciate the things you
do have in life, the holiday season is a particularly important time to
re-examine our own lifestyle ceilings. As Mark always says, “If you’re hard on
yourself, life will be easy on you.”
If we at Kemp Harvest Financial Group can
help you in any way with regard to your financial planning needs, please feel
free to contact
us.
For more topics like this, check out our radio show
“Retirement Plain and Simple” every Saturday morning at 8 on WNPV 1440 AM
and like
us on
Facebook!
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linking. NPC #102726 12/17
