Living Well, Spending Wisely: Mastering Your Lifestyle Choices

Are you making intentional spending decisions that truly enrich your life? Or are you caught up in an unsustainable lifestyle at odds with your core values and long-term goals? At GPS Wealth Management, we believe living well is about being purposeful with your biggest expenditures. Let us help guide you in optimizing your lifestyle for what matters most.

The Foundation: Maslow’s Hierarchy of Needs

Psychologist Abraham Maslow theorized that human needs exist in a hierarchy. At the base are physiological and safety needs like food, water, shelter. The next levels encompass needs for belonging, esteem, and ultimately self-actualization – realizing your full potential. Fulfilling these fundamental needs through mindful spending can enrich your quality of life.

The Biggest Investment: Your Home

For most, housing is the single greatest lifetime expense. That’s why structuring your mortgage strategically is paramount. Consider the benefits of a 15-year fixed mortgage that builds equity quicker versus a 30-year term. Before buying, ask yourself – do I truly want this? Need it? Can I afford it?

The Upside of Downsizing

Perhaps your housing needs have changed. Downsizing to a more appropriate property can unlock tremendous savings. Invest that $300,000 home sale profit, and it could potentially grow to over $900,000 in 20 years. Those found dollars provide flexibility to pursue other lifestyle goals.

Guidelines for Smart Homeowners

Periodically reevaluate if your home still fits your needs and means. If not, consider “right-sizing” to a new property better suited to your current lifestyle. And be sure to structure the ideal mortgage – one that balances short-term costs with your long-term equity goals.

Luxury & Leisure: Where to Splurge?

Owning luxury items like high-end cars can be thrilling but know the true cost. A Ferrari California runs around $200,000 upfront, plus $40,000 yearly just for taxes, insurance, and upkeep. Prudent alternatives exist – a comparably performing Porsche 911 half the purchase price and annual ownership costs. The same discerning approach applies to discretionary leisure spending like fancy vacations.

The Ultimate Buying Decision

Sometimes, reasonably priced luxuries may deliver almost equal satisfaction as premium versions. For $20,000 less, a BMW 535i has nearly identical engine performance as the pricier 740i model. Invested wisely, that $20,000 gap could potentially grow into over $135,000 in retirement funds after just 20 years.

Estimating Your Ideal Retirement Lifestyle

Speaking of retirement, these spending habits can drastically impact your ability to live comfortably in your golden years. Most underestimate future income needs by 20-30%. Models showing achievable spending levels based on your unique circumstances are invaluable.

The Power of “Found” Money

By rethinking recurring expenses across your home, luxuries, and leisure activities, you may be able to redeploy thousands annually towards goals like retirement. Invested and compounded over decades, those redirected dollars could accumulate into seven figures. GPS can help implement investment strategies to maximize this “found” money’s potential.

Numerous factors go into crafting an ideal retirement lifestyle, but living intentionally now can make it a reality.