How your lifestyle affects your financial management

Managing your finances may seem like rocket science when you frequently end up short on cash, even when you don’t remember spending much. Depending on how often an individual receives paychecks, a financial management plan should always be followed accordingly. Of course, the major contributing factor to how much you spend and save up is always the kind of lifestyle that you lead. Some people may make less than others, but end up having more in their savings. While being frugal plays a part in managing finances, your values also affect your spending. Here’s how your lifestyle can affect your financial management

Values 

Depending on what certain individuals value, they may spend more or less based on what they enjoy doing, collecting or purchasing. Some individuals lead busy schedules that do not afford them time to cook, and thus they spend a big portion of their income on takeout. On the other hand, lifestyle also includes hobbies. People who enjoy video games will not only spend a fortune on games and the latest consoles, but will also invest money in setting and ambiance to enhance their gaming experience. Depending on how much they make, this can be very expensive to invest in. That said, individuals who have had a financially unstable upbringing are more likely to save up the majority of their paycheck, and always look for the cheapest methods to sustain themselves. While this can help them save up more, this extreme frugality may negatively affect their mental state, as leisure time is just as important as financial security, seeing as it helps a person recharge and look forward to the future. 

Miscellaneous Items 

An individual’s choice in services and items can also greatly affect their ability to manage their finances. The financial advisors from DyerNews.com explain that even mobile carrier services and the bundles you choose for your phone calls and internet browsing can dramatically affect your money management plans. Some individuals may subscribe to cheaper bundles and end up paying a lot more when they don’t stick to the fair usage policy. 

On the other hand, other miscellaneous items include beauty products, snacks and grocery shopping. Some individuals may spend a big chunk of their paycheck on cosmetics, junk food, or luxurious meals. That said, it’s also possible to purchase miscellaneous items that you don’t need for the sole reason that shopping can be euphoric to some people. 

Leisure 

Surprisingly, people who don’t spend much on leisure items, services, and holidays for the purpose of saving up are more likely to end up spending a fortune eventually. Investing in leisure time is an essential part of life, as it helps people cope with their busy lives, and allows them to take a breather. When frugal individuals avoid spending a dime on any leisure item for a long period of time, they’re more likely to relapse and spend a fortune on something to spoil themselves for once. 

On the other hand, people who spoil themselves in increments usually spend within their budget and are less likely to splurge on something that they do not need. Consequently, setting a percentage of your income for leisure is the financially wise decision to make, as it will keep stress at bay and will also help you save up in the long run. 

Plans 

Youth who have plans for the future, no matter how small, is more likely to be financially responsible. The goals can be purchasing real estate, paying for college, or starting a business – but whatever it is, these objectives can help individuals be more financially responsible. Having no plans for the future that require financial investment may make an individual a spendthrift, even if they cannot afford it. 

Investing money in something tangible, such as property or appliances, is also a smart decision as these are assets that can be liquidated in the future. Having a savings account should never be the only way an individual puts their cash aside, as currency can be affected by inflation and the state of the economy, while assets retain value. 

Financially independent individuals can find it difficult to manage their finances, especially when they don’t have any future plans. People who have goals that require financial investment are more likely to be frugal, while others may spend as much as their paychecks allow them to. On the other hand, individuals who have had a financially unstable upbringing are more likely to save up the majority of their income. However, a healthy financial plan always includes a percentage of income for leisure purposes as well as a higher percentage that goes into savings.

The editorial unit