How Can You Know If You Can Afford Your Current Lifestyle?Fast Action Finance
Our spending habits affect our lifestyle one way or another, or at least the choices we make lead us to our goal of what is most ideal. For example, you have earned an extra $2,000 per month. What do you plan to do with it? Do you spend a week in the Maldives? Do you set it aside to purchase your dream penthouse apartment? Do you spend it on a high-end fashion accessory? Do you even save it for the possibility that you might choose to pursue a degree in academics?
Those are just four of the possible lifestyles put into light by a single question. Each answer to the aforementioned is a peek into how someone might choose to live their life. However, the bigger question that everyone seems to put off is: Can you afford the lifestyle of your choice?
Realizing your current reality
Let us snap back into reality here for a moment and look at things from a brand new perspective. Many individuals who fall into the twenty year old category today are under the influence of idealism, assuming that it only take a few years before they can buy their own penthouse or go on that long backpacking trip across Eastern Europe. Though it might not be too difficult for those who are privileged, it might mean that these dreams can turn into years and years of hard work for middle-class or lower-income individuals within the working population.
If you plan to commit to a fashion-forward or traveler lifestyle, it can entail costly choices. While you might have the impression that the days ahead are the ones that have the most importance, it is more likely that you need to consider how you can tie all loose ends after a big trip or how you can keep up with your expensive home’s upkeep the following months.
Questions to help determine your current financial reality
Can you produce the right answers or at least find one or more central record that is holding on to your files to find the answers? If you are currently in a relationship, is your financial status clear to you individually and as a couple? Here are some of the questions you need to ask yourself:
• Am I well protected from a legal or and insurance standpoint?
• How much do I spend a month?
• How much gross income do I earn?
• What are all my current liabilities and their remaining payoff amount?
• What are all my assets and their respective values?
• What is my FICO score?
• Do I even know my own net worth?
If you are unable to answer the questions, these questions are only going to create more questions in your head until the point you may be overwhelmed and shut down. Now is a good time to stop and sort your thoughts out. If you are financially uncertain of where you are today, how can you know where you want to go the next day and how to get to where you want to be?
How you should figure things out
Turning a blind eye to habits and traps is simply too easy if it can get you a spot in your dream graduate school or dream pair of bespoke shoes. Overspending is one of human’s greatest weaknesses and it can be detrimental to one’s financial status and efforts to manage one’s money. Before you realize it, you may have sunk waist-deep in debt and you may already be six months late in your monthly repayments. The key to solving this problem is to plan out a long-term financial plan that allows you to purchase small things of joy without squandering your savings entirely.
Ask yourself what your goals are
The process of taking stock of your current financial status is never saved till the rainy days or for fun and the real reason behind it is imperative. The truth shows that we can’t achieve our goals in life unless one is clear on what your current situation looks like. Everyone has their own set of unique life goals and these goals go in tangent with one’s finances.
You have to keep in mind that not everyone wants to purchase a huge mansion or earn a billion dollars. There is nothing better or worse about having more money or less money as long as you are certain on your life’s outlook and why it should be that way. Always be clear on whether you want to create a lifestyle or life – the latter means a path to lasting fulfillment and true happiness.
If you need to secure an emergency fund to give you more breathing space while you commit to a certain lifestyle, you can contact Fast Action Finance today. We can loan you a sum of money quickly when you are badly strapped for cash.