Luxury with Intention: Aligning Lifetime Spending with Long-Term Financial Goals

To quote the lead character in the 1986 movie Ferris Bueller’s Day Off, “Life moves pretty fast. If you don’t stop and look around once in a while, you could miss it.” The same can be true for our finances; it’s easy to lose track of where our money goes. However, lifetime spending with intention can provide us with the path toward long-term financial security and happiness. 

Intentional spending means making purposeful purchases and aligning spending with values, goals and needs. It’s a conscious decision to spend money on what matters rather than making impulsive or habitual purchases.[1] Intentional spending does not simply mean being frugal. With intentional spending, you can still make thoughtful, purposeful choices for indulgences that will enhance your life and bring you joy today. Additionally, many people assume living indulgently requires reckless spending or abandoning long-term financial goals, but that doesn’t have to be true. By balancing smart financial habits with indulgences, you can have both enjoyment today and security for tomorrow.

The crucial first step before living any high-end lifestyle is to build a solid foundation. As part of that foundation, ensure you have an emergency fund, keep high-interest debts to a minimum and set aside tax-efficient and tax-advantaged funds to support you in retirement and beyond.

Once you have a solid foundation, explore these seven steps to help you create a values-based budgeting approach that empowers you to spend wisely while enjoying the finer things in life.

1. Define Your Values: List your top five values (e.g., creating a legacy, financial freedom, supporting causes).
2. Identify Financial Goals: Set clear financial goals that align with your values and create realistic milestones for achieving them (short, medium or long-term).
3. Prioritize Goals: Decide which financial goals are most important to achieve. 
4. Create a Budget: Use a values-based approach to budgeting and allocate funds reflecting your priorities.
5. Establish a Luxury Budget: Set aside a specific portion of your income for luxury spending to enjoy finer things while maintaining financial stability.
6. Track Spending: Monitor spending to better understand your income. Allocate funds for necessities, luxury spending and savings.
7. Align Spending with Your Values: Evaluate how your spending aligns with your initially defined values.

One of the best ways to live a life of luxury without sacrificing long-term financial health is to invest in experiences over possessions.  Spending on experiences can offer things like lasting memories, stronger connections and enhanced personal growth – it’s the reason why many people say, “You can’t take it with you.” Additionally, there may be ways to balance a luxurious lifestyle while at the same time building financial security. For example, a vacation home provides you with enjoyment today but may also provide you with a long-term asset that can increase in value over time or offer passive rental income in the future. 

Changing lifetime spending behaviors will be challenging, but thoughtful planning, wise decision-making and careful monitoring will allow you to indulge today and, most importantly, achieve your long-term financial goals.  Take the first step today: reflect on your values, jot down your financial goals and start crafting a budget reprve longer and follow increasingly diverse retirement paths, it is more important than ever for participants to understand how these funds function and how they fit into a sustainable, personalized retirement strategy.

[1] Source: New York Legal Assistance Group