A financially sustainable lifestyle is all about living in a manner that does not deplete your essential financial resources. Basically, it is about creating a kind of lifestyle that would endure in the long run and would be able to survive the unexpected.
Why work towards Financial Sustainability?
When we talk about financial sustainability in the personal sense, the purpose isn’t to live like a miser who never goes out, never allows himself a treat, and cuts open the toothpaste tube to make sure that even the last ounce of toothpaste is utilized.
The main purpose is to ensure that the amount that you are spending can easily be covered by what you are earning so that you may continue your lifestyle without creating any debt. It also means being able to save enough as a buffer against unexpected events that might happen. A financially sustainable lifestyle is not a ‘hand to mouth’ approach where you live at the edge of your earnings; it is about having enough of a margin to be able to survive a job loss. There are two major aspects of living a financially sustainable life:
Managing the Money at hand
While spending money is rather unavoidable for everyone, it is wasteful spending or spending without concrete purposes. That in turn may lead to certain bad habits that will drive up your debt and make saving for the future a very difficult task. Nowadays, with the ease associated with getting a new credit card, it is very easy to rack up debt and put yourself in a financial hole. People who realize this and become mindful about their spending have a good chance to be able to preserve their financial future.
Managing money efficiently is much easier said than done as one would need to exercise a fair bit of caution. It would obviously involve working with a strict budget and acting proactively to bring down frivolous spending.
Supporting Your Needs without Eroding Your Retirement
These days, the average life expectancy for humans has increased by quite a margin, while retirement ages remain pretty much the same. This, plus the ever increasing cost of healthcare and living give rise to the need to live a sustainable lifestyle so that you are in the position to survive retirement without much change in your life. Many people underestimate the effort and the changes that the transition to retirement brings along. It isn’t just about saving enough; it is also about taking the expected inflation into account. Clearly, having a good financial plan is essential as a starting point.
How to go about it?
Start with a detailed plan for financial sustainability. Also, it is important to state here that this plan must be thought out with all your family members taken into confidence. Everyone would be required to do their part and come up with a framework that can help address expected as well as unexpected expenses that may arise in the course of life.
It is never ideal to wait for an emergency to occur to make you realize how financially unprepared you have been up to this point; start working towards it proactively, start on it from today itself.
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