As the financial year draws to an end and another begins tomorrow, it may be a helpful time to consider our financial priorities. Spreadsheeting a realistic budget of all expenses to gauge how much we really can spend in order to live within our means is a good start. I wonder, though, whether there isn’t some benefit in assessing what our real needs are and how much surplus there then is.
Everything is relative to the world in which we live. A third world observer may wonder why we have the luxury of building a house for our cars, or having a second toilet (maybe even having a toilet!), or having a room for each child. In a first world life, our building covenants might not even allow for frugal modifications where we want to make them. But when my kids complain about living without, I remind them that we are in the world’s top few percent of rich people, just because we live in Australia.
And there is no doubt that, living in relative wealth in a Western economy, we can be blinded to a few generalised home truths.
1. The wealthier people are, the less generous they have been shown to be in relative terms. Maybe this can be due to understanding money pressures better or being more financially committed, but it can betray decreased benevolence, too.
2. The wealthier people are, the higher their proportional standard of living has been shown to be.
3. The wealthier people are, the more anxious, frustrated and tense they can tend to be due to excessive work responsibilities that are linked to funding their lifestyle. Along with this can come greater relational and marital tension, even if it is offset by other factors.
4. Most people see ‘others’ as wealthy, usually even those who have just a little more. That means others with a little less see them as wealthy! It is all relative. Q: How much is enough? A: Always just a little more than what we have.
If you could possibly be seen to be relatively wealthy by others, how could your own budget be trimmed just a little to better have it match the lifestyle values that you would say you really believe in? We spend on that which we are attracted to (and advertisers are paid to know what works on us). In the end, we squeeze out that which is not pressing and tend to end up with a budget that tells the story of the life we have and not the life we want to be known for.
Time to make any changes to yours?