As everyone is thinking about financial perspectives and priorities during the first weeks of the new year, we encourage client couples and families to ask themselves a few lifestyle and values questions that will help them determine their approach to money – and help us in going over their budgets and goals. No two clients are alike, and lifestyle goals are as varied as the people we work with.
First, simply think about your personality type. Are you more reserved or outgoing? Now, you might be wondering what that has to do with your money, but think about it – have you ever met a gregarious person who was also frugal? If I meet two new clients, one of whom is more reserved and introverted and one who is more outgoing and highly social, I can tell you right away who typically has more money in savings.
This question will filter through all of the other questions you’ll ask yourself as you think about your financial priorities. We see many client couples who come in asking, “Dave, can we afford this?” However, just because you can afford something doesn’t mean you should buy it. This is where we often see disagreements between spouses.
Sit down with your spouse and truly think about what your lifestyle is and what you want it to be. How do you view your money? Is it something you must spend, or are you collecting it? If you’re collecting money, why are you collecting it? This will make a difference in nearly every other financial decision you make.
Ask yourself how you view your cars. Do you buy or lease? Do you buy new cars, or slightly used cars? Do you buy a new car every few years, or do you buy a reliable model and drive it as long as you can? If you drive expensive or fancy cars, is it to keep up with Joneses, or do you truly enjoy collecting classic cars as a hobby? Remember, how you approach your vehicles will make a big difference in your cash flow.
Next, think about how you view education. Were you the first college graduate in your family? Do you have advanced degrees and letters by your name? Or were traveling and trips to the public library your primary education? Do you want to pay for your kids’ education, or do you believe they should pay their own way? We see many clients who value education and earning multiple degrees – without lofty income goals. We also see those clients who believe in the school of life. Each makes a difference in that ever-important cash flow.
Now, ask yourself how you view food. Is the experience of fine dining something you want as a regular part of your lifestyle, or is cooking at home where you’re most comfortable? Do you want the highest-end appliances for your cooking projects? Do you entertain? When you travel, do you seek out famous chefs’ restaurants, or do you rent a condo and cook there? Are you going organic, or into fine wine? These lifestyle choices and preferences all impact your daily and monthly budgets.
And finally, think about your housing. Personally, I could live in a two-room home as long as they were the right two rooms! But with boys to raise, that’s obviously not an option. What type of home is right for your family and lifestyle? Again, are you keeping up with your friends and family, or are you buying a smaller home in favor of saving money for more travel? Do you own or rent? Do you plan to buy a home soon? If so, do you want to spend as much as the bank will loan you, or is a smaller house payment your priority?
Personality, lifestyle and values all play major parts in your financial priorities and perspectives, and all have an effect on your cash flow and savings. Our team can help you establish a working budget and financial goals that align with your values and preferred lifestyle – whether your current one, or the lifestyle you envision for your future. Give us a call.
Article by David Smyth, Senior Partner at Family Financial Partners — a financial services firm in Lexington, Kentucky.
Download our FREE financial planning checklist here.
1792 Alysheba Way,Suite 201,Lexington, KY 40509
Phone: 859.219.1006Fax: 859.219.1012
First Name (required)
Last Name (required)
Your Email (required)
*Representatives are licensed to offer insurance and annuity products in CO, FL, GA, IN, KY, MA, MD, MI, MN, MO, MS, NH, OH, SC, TX, WV, VA, WA and WV and are licensed to offer investment products in AL, AR, AZ, CA, CO, CT, FL, GA, IL, IN, KY, MA, MD, MI, MN, MO, MS, NC, NH, NM, NV, NY, OH, PA, SC, TX, WA, Washington DC and WV. This website and its content are not intended for residents of other states. Securities offered through: The O.N. Equity Sales Company, Member FINRA/SIPC, One Financial Way, Cincinnati, OH 45242. 513.794.6794 Investment Advisory Services offered through The O.N. Investment Management Company. Estate Planning Services provided in conjunction with your licensed legal advisor.