Living a happy and satisfying life is the pursuit of most people. We all want a good lifestyle. However, choosing the wrong lifestyle for you can have significant financial consequences. On this episode we look at two couples who chose slightly different lifestyles, even though they made the same income, and then compare their financial position after 10 and 30 years. The difference will surprise you!


Lifestyle Choices

  • How do you match your lifestyle for your income?

  • You can only afford a lifestyle that fits into your income.

Many people actually create a lifestyle beyond their income, and use debt to fund that lifestyle, but then it’s not sustainable and they end up going through extreme emotional hardship fighting that debt and lowering their lifestyle. The hard part is that it often requires three times as much effort to fight your way out of debt, than to live within your income in the first place.

Overspending Example:

  • Earn $50,000

  • Spend $51,000

  • 10 years later - Debt $10,000

  • Interest 10% = $1,000

  • How Much Do They Have to Cut Lifestyle?

Yearly obligations and costs after 10 years of overspending:

  • Interest $1,000 per year

  • Principal $1,000 per year

  • Reduced Lifestyle $1,000 per year

They were spending $51,000 per year and now must spend $48,000 per year for 10 years to get out of debt.

Lifestyle Choices: Fishers Vs Burks

  • Both married in 1999

  • Bill and Tom had similar jobs at Wilson Financial

  • Sally and Sue were both elementary school teachers

  • Same family incomes

  • Both couples owned a home

  • Both drove two cars

  • Both took annual vacations

  • Both ate out every Friday night for “date night”

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Ten Years Later … Fishers saved $0 while the Burks saved $117,000.

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