How to Build Wealth AND Enjoy Life - Part 1

Building wealth while also enjoying life has always been a hotly debated topic. Whether it is a parent, sibling, or friend, when someone tells you to save, invest, and think smartly about your future, it is typically met with this common objection; “but I’d rather have fun, live my life and spend my money now”. So I say, why not both?

The Money Personality Spectrum

First, we must acknowledge that having both can be very difficult for some. Everyone has their own money personality. On one side of the scale, you’ve got austerity - beyond tight with money and spending money makes their stomach turn. To be so far on this side of the scale means you have an unhealthy relationship with spending and a fear of the long-term outcomes of spending money inappropriately.

On the other end of the scale, there is recklessness, where there is absolutely no care or thought whatsoever for spending money. Both of these extremes can be just as damaging to building wealth and having fun at the same time. Both sides of the scale make for bad financial planning.

The Dangers of Extremes

You want to enjoy yourself, especially when you're in your twenties and thirties wanting to eat nice food, do more with your friends, and see more of the world. You should not feel guilty about doing those things, as long as you have got somewhat clear objectives and a clear way forward and how you're going to achieve those longer-term goals. So not jeopardizing the fun, but just having a bit of control.

Embracing Enjoyment Without Guilt

The only way to achieve that is by actually sitting down and asking yourself “Can I achieve my important long-term goals and still have fun?”, because if you don't actually ask that question and look at it and figure out what those long-term objectives are, then you are really just guessing and you might guess “No, I can't. So I won't have that fun”. That's just a guess, you have to sit down and get some clarity.

Striking a Balance: Long-Term Goals and Fun

If you can measure what's coming in, what's going out, where it's actually going, and what you're going to need to be able to achieve those objectives and everything left over, you can allocate towards having fun. But it would be so scary to do that if you didn't know that you could.

The Importance of Clarity

Once you know your expenditure, automate your spending so you know what you need and then have your goal accounts for different goals. So you have your travel fund, you have your car fund, whatever it may be, and then you can allocate resources to that and when it comes time to go on that holiday or buy that car, you can spend it without guilt because you know everything else is going to be fine.

Delve further into how to build wealth while enjoying your life in our next blog where we will highlight the drawbacks of relying on a single savings account for your many financial goals, stressing the need to create separate accounts to ensure clarity and prevent unexpected setbacks.