Putting Some Perspective on Your Living Standards

So I share lots and lots of advice and stuff about how one can possibly go about stretching each and every one of their pennies and pounds spent, which is only a good thing I guess. After all, the cost of living is indeed rising at a rate which many of us cannot keep up with by default, so it’s a handy skill to learn, that of how to ensure you squeeze every bit of value out of any financial transaction you enter into.

While I’m happy to share what are effectively “micro” cash-saving tips and hacks, doing it in-the-small and occasionally in this fashion can only go so far. You have to take a few steps back and zoom out every once in a while so that you can have a good look at how the bigger-picture is developing. There has to be a bigger picture, for starters…

The bigger picture is that of the “end-goal” to reduce your cost of living and operate your personal finances in such a way that as time goes by, you build up a surplus which can either be saved up, ideally invested or just parked in case of a rainy day. It defeats all rational purposes otherwise saving two pounds here, four pounds there and even hundreds of pounds elsewhere, only for the weekend to come with you blowing all the extra money you saved.

I mean look – it’s okay not knowing what to do with some money you have lying around for a while. You can always get back to it later – get back to how you’re going to proceed to make wise decisions about what you’re going to do with it, that is… In the meantime make sure not to spend it and undo all the efforts which went into uncovering it in the first place.

How do you do this though? It’s simple. You have to put some perspective on your living standards and proceed to determine what it is exactly you’re comfortable with. Do not fall into the trap of proceeding to match your means to your living standard, especially if that living standard is higher than that which you would otherwise be content with.

Don’t upgrade to a bigger car which guzzles more gas for example and don’t start being reckless around the house with things that contribute to your variable costs, such as your utilities. A lot of the things which you spend your money on forming part of your existing life are perhaps representative of a standard of living you already find comfort in, some of which might even offer you a lot more value than what you pay for them.

Some of the best Christmas gifts to send can still be found on platforms such as Broadway Basketeers’s online store for example, so there isn’t all that much higher to go, if at all. Let the money pile up and if you can, invest it in a segmented way which allows for part of it to grow, fuelled by compounding interested.