Do You Factor in Lifestyle Into Your Finances?

I always enjoy chatting about personal finance with those that are not immersed in the whole personal finance bubble. Those of us that read personal finance blogs are in a bit of a bubble because we ALWAYS think about money related issues. We actually enjoy discussing financial issues. We actually look forward to writing, reading, debating, and researching personal finance stuff. Do you ever think about those that don’t really care all that much for personal finance?

Don’t worry, I’m going somewhere with this. The other day I was chatting with a casual friend about finance and saving money. Before I could share much about the topic, my friend made a very fair point. He said that he wants to save money but he wants to have a life. He said he wants to live for TODAY, and not for tomorrow. That’s a valid point because many of us get caught up in thinking about tomorrow, that we forget to live today.

This is why I wanted to factor in lifestyle into your finances for today’s article…

Saving money is pointless if you have a horrible lifestyle

I was comparing annual income with my good friend and we realized that he made more money than me throughout 2011. As I was congratulating him, he reminded me that I went on three major trips in the year, while he couldn’t get any time off and didn’t end up doing anything fun the whole year.

I was then reminded once again why I love working for myself so much. I can make less money some months, but my quality of life doesn’t have to suffer. I don’t have to stress about waking up early and commuting to a job that I can’t stand and only work because I need the money for bills. Money management should factor in lifestyle because money’s useless if your always stressed out.

Personal finance advice needs to factor in lifestyle

What’s the point of saving money if you don’t have any goals? For me, money is a tool that allows me to enjoy life. If you want to work just for the sake of adding digits to your bank account, that’s cool. The thing is that you might burn out because you’re not enjoying what you do. If you don’t have a decent lifestyle, you’re not going to feel good about the money that you do manage to save.

Plenty of personal finance advice doesn’t apply to everyone

The problem with money advice is that there’s no one-size-fits-all answer out there. On the other hand, the beauty of personal finance blogs is that there’s a niche out there for everyone. If you’re a married person then you’re obviously going to read a blog that’s run by a person with a family. In the past, financial advice was annoying to consume because it wasn’t realistic. As a single dude, you’re not going to cut your own hair to save a few bucks because you want to look good when you go out. Conversely, if you have three kids, you’re going to want to learn how you can find the best deals for groceries.

Sacrificing on lifestyle should only be temporary

I worked full-time while I studied full-time. As you can imagine this wasn’t so fun at the time.

The reason that I went through this is that I believe that sacrificing on lifestyle to save money or make money should only be done on a temporary basis. I totally support sucking it up and working hard for a period of time. The point of this is that you can build your savings and get ahead financially. The reason that this should be temporary is simply because you don’t want to burn out or create any health problems for yourself. You should never sacrifice your lifestyle for the long term just to save more money. This is not worth the toll on your health.

What it comes down to is that we need to take our quality of life into account when figuring out our financial situation. The trick is finding the perfect balance between income, savings, and quality of life. That’s just my humble opinion.

What effect does your lifestyle have on your savings?

Martin’s personal finance blog Studenomics helps young professionals find the best online bank and figure out what to do after college.


  • I, too, am working full-time while taking full courseloads (10 credits/semester) in grad school. On top of planning our wedding, choir rehearsal, and public transportation, that doesn’t leave much space in my schedule for LIFE: vacation, relaxation, social time, even volunteering. The decrease in quality of life is noticeable, but there will be a trade-off in a while because once I graduate (a goal with a deadline), I won’t be working as many hours in total.

    I think it’s worth it because I’m supporting my little household: me, my fiancee (who has a day job that provides a basic living stipend, and a side gig that pays off her debt and helps her save for emergencies), and the two cats.

    We have plenty of goals — and ambitious ones at that — and the largest sacrifice we’re making is TIME. Keeping our standard of living low isn’t difficult for us, and it doesn’t feel like punishment, because we’re still comfortable. We just aren’t living as large as one might expect us to given our income level. A major goal this year is to save or donate a combined 50% of my net income, actually — we have to live on less! Our goals — stay out of debt, save for the future, and prioritize what’s important to both of us — are pretty far from the expected norm in America. (I’ll put my hand up for always thinking about money-related issues.)

  • Interesting. Many people would happily agree you shouldn’t sacrifice your lifestyle to save more money, but do they feel the same about sacrificing your lifestyle to make more money? As you mentioned, your friend made more money than you but you had the flexibility to derive more satisfaction out of the money you made.

    What would really be awesome is to be able to enjoy the same lifestyle on significantly less money while simultaneously increasing your flexibility. Since I just quit my job in pursuit of greater flexibility, I can’t wait to see how things turn out. I’m feeling pretty good about it.

    • I think being able to enjoy the same lifestyle on significantly less money while simultaneously increasing your flexibility is a great thing to aim for. Congrats on quitting your job :)

  • Martin

    Thanks for the responses. Sorry I missed these. I was away for the week.