You Only Live Once, So Don’t Blow It!

you_only_live_once_so_dont_blow_it.jpgTo save or to yolo? That’s the question.

Can the battle between frugality and “living life” cease to exist? And if so...

How do you strike that elusive balance?

Let’s examine “balance”, shall we?

It’s a soothing word to smooth over underlying conflict between two camps.

First, there’s work-life balance. A conflict of time spent between work and life outside of work.

Then there’s the balanced diet. A conflict between different food types. Natural food vs. junk food. High-fat vs. low-fat. High-carb vs. high-protein. And so on.

And not to be outdone…

There’s also the balanced budget. In personal finance, it’s taking the money we earn (after tax) and allocating chunks of it to: fixed and variable costs, savings, investments, debt payments, etc. A balanced budget is achieved when 100% of our money is properly allocated.

The conflict comes when we overspend in one area because it takes away from other areas.

Excess can be avoided with balance.

But - is balance just unicorns and rainbows?

YOLO Isn't a License to Blow Your Money

Here’s the thing: There’s no freedom in living paycheque to paycheque.

If we get everything (we think) our heart desires and blow away our money like tomorrow doesn’t exist - what can happen?

Here’s exhibit one: A 31-year old pharmacist who lives with his parents despite earning $130K per year. He gets his mom to do his laundry and make his meals - so he can party in Miami with the boys on weekends.

Frugality can be a self-imposed cage of boring mediocrity to people like exhibit one. Because if frugality is an exercise of balance, and balance by definition implies evenness (smoothing out highs and lows), then wouldn’t you be missing out on the highs of life?

The problem with this shallow yolo mindset is that people end up dependent on money to buy escape from real life’s struggles. But after the “high”, there’ll be an inevitable drop. What happens then?

People get stressed over money and and depressed over being “stuck”. Eventually they may find themselves blowing money they don’t even have. Now they’re stuck with debt in a job they hate.

Related: How to Budget Without Tracking Every Dollar

How Do You Define a Life Well Lived?

Let’s not tiptoe around it:

Frugality is work because it involves time and effort.

Take food for example. For me, eating healthy is a habit because it’s part of my life. But make no mistake about it, cooking our meals requires both my effort and my time. Do I wish I’m outside playing with my kids instead of cooking on a Sunday afternoon? YES of course. The only thing is, we need food to eat. And buying unhealthy take-out food regularly is not an option for me.

What can I do about it? I make sure I cook as efficiently as I can. I meal plan and cook in big batches once or twice a week.

With frugality, over-thinking and guilt can be a struggle:

Is this really a need...or just a want? Should I spend money on _____ when I could be saving more instead? What if there was a better deal I missed out on?

What’s a Smart Saver to do?

Stephen Covey recommends in his book the The 7 Habits of Highly Effective People, to begin with the end in mind. Ask yourself this:

How do you define a life well lived? Zero in on what’s truly important to you.

Answers may not come quickly, but keep digging. If something pops into your head, write it down then ask yourself why. Go beyond the surface and dig deeper by asking yourself a series of ‘WHYs’.

You can create a plan on how to get there. Because it’s never too late to create a future that you want.

A Habit of Frugality

Even if frugality involves time and effort, and over-thinking it can be a struggle…

It’s a means to accumulate money for your future quicker. A means for financial security and peace of mind.

It’s self-restraint from impulse and extravagance.

Without self-restraint we’d lose sight of what’s reasonable, what’s considerate, and what’s appropriate if we let our emotions run wild without reason.

In weight loss for example, self-restraint takes the lead so we say NO to picking up that bag of kettle chips AND tuxedo cake from Costco.

When it comes to physical fitness, self-restraint takes the lead to make sure we stick to our new workout schedule.

What about saving money? There’s no shortage of awesome books and blog posts with practical guides on how to save money. Million Dollar Journey shares 28 ways to save money. And here are 15 tips from Boomer and Echo. 

And of course, Stephen’s top money tip is to plan ahead. Self-restraint takes the lead so that we stick to our plan before making a purchase.

But the thing is…

Consuming information will NOT create change. Putting them into action will.

A Balanced Action Plan

You’ve heard it before: Cut costs on your nonessentials. And spend guilt-free on what’s important to you.

But how?

According to T. Harv Eker’s Secrets of the Millionaire Mind a balanced allocation of your income (after tax) may look like this:

  • 50% necessities
  • 10% long-term investing 
  • 10% savings
  • 10% play and fun
  • 10% education and self-improvement
  • 10% giving and charities

Eker recommends creating different accounts to funnel your income into. The money in your “play” account, you can spend guilt-free to nurture yourself.

Final Thoughts

YOLO is never an excuse to live paycheque to paycheque.

But being the Grinch is no fun either.

So where do you draw the line between excess, balance, and deprivation?

Start by figuring out what you really want in life. Zero in on what your priorities are - and imagine the kind of life you want to create.

It’s also good to review and reassess your priorities from time to time. Because chances are you’re not the same person you were 10 years ago. Or even 10 months ago.

Balance is elusive because it’s a moving target dependent on 5 factors: age, family status, income, health and time constraints. These factors strongly impact how we define what’s important to us right now.

As your priorities shift over time, how you define balance evolves.

Balance can work - but only if you put in the work.

Make your daily choices count. Afterall, you only live once.

Question for You

Tell me: How do YOU define balance?

Disclosure: Some links in this article may be affiliate links. We're letting you know because it's the right thing to do. Here’s a more detailed disclosure on how HTS makes money.

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Comments

R. LeBlanc
R. LeBlanc's picture

I agree with everything you say. People have to be responsible to themselves.

For 44 years, my husband and I have lived on a budget and stick to it. It allows us to sleep at night. One young couple asked what our secret was and I told them:

add up what their income is for the year, all income, interest if they're lucky enough and divide it by 52 or 26 (see below).
Then figure out all all your yearly fixed expenses, firstly your fixed expenses: mortgage, insurance (car and property), cable, phone, tv, water, propery tax, electricity, heat, etc., ONLY the expenses you have to pay; then, figure out: what you spend on groceries, what you need for incidentals like dentist, glasses, etc.; then if your taxes are taken out at work, put a bit aside "just in case"; then what you have left you designate accordingly to what you want to do with it and providing you have any left. You divide that by 52 or 26 depending on your paycheque if you're working, and voila, there's what you need to put into the bank.

Once you do what comes in and what NEEDS to go out, you know if you're either strapped for money or have some to save!

There's a bit more to it but it works for us. At 65, with absolutely NO pensions other than CPP (which isn't great) and OAS, we invested enough money to provide for our retirement. While we don't have tons, we have enough to live on and then some and I know I won't have to worry... Spending my principal is not an option but living comfortably this way is.

While not everyone is able to do this mainly because their income is low, I cannot understand why some people, especially the ones in the magazines who make way more than most, "find it hard to make ends meet." Drives me crazy.

Enjoy your newsletter immensely. But I still think the credit cards are of one's own choosing, whatever works for you. Air Miles is great if you travel, but PC Financial is the best if you don't and you want that free grocery option. As we never fly, it certainly is great for me!

I also get reward points at Healthy Essentials for various options on the site, and get Amazon gift certificates for 25.00 whenever I hit 100 points. Another bonus. I also use my Air Miles for cash, Optimum for cash, and the occasional survey for PetroCan to get .10 off each litre card. I think I deserve a medal for being to prudent!!

Thanks for helping people out. I could write a book myself.

Yours truly,
R. LeBlanc

July 26, 2016 @ 12:43 pm
Chris McCann
Chris McCann's picture

Why add a comment when I so completely agree?

Being frugal is all about self-restraint. and it pays its dividends in a life well enjoyed. To get to being committed to frugality one needs to examine some life objectives and decide on related priorities. These priorities can be translated into various budget accounts.

For me, it has not always been this way. In my 20s and 30s my life was lived from paycheque to paycheque with absolutely no personal savings for retirement, vacations, emergencies, etc. I retired at age 55 and am now 66 and on my second marriage. I live comfortably on my pension because my wife and i share the same approach to saving and spending.(She has her own pensions and expenses.) But we share housing expenses, food, entertainment, vacations, car.

We married 13 years ago and each of us had paid off their mortgage before we purchased a house jointly.(mortgage free). I had already established a system of virtual savings accounts which are sub-accounts of my main savings accounts. These virtual accounts are based on my priorities. There were some modifications necessary to my budget as a married person but nothing too drastic. I took this approach of virtual accounts because of the facility of computer-based tracking of spending and on-line banking. Only recently have I realized that my budgeting using virtual accounts mimics the envelope-based system of budgeting. Over the years I have helped several others (family and friends) to set up a similar system.

I personally have realized the importance of financial literacy no matter what your income level. It all starts with a review of life objectives. This was a great article!

Chris McCann

July 26, 2016 @ 8:24 pm

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