Why financial stability is indispensible for a fulfilling lifestyle
- Lifestyle-Driven Income™
- Ivy, LyfStyled
When people envision a fulfilling lifestyle for themselves, one important foundational element often gets overlooked: financial stability. Often times, people are drawn to visions of traveling the world to explore dream destinations, spending their leisure time creating memorable experiences with loved ones or exploring creative and meaningful hobbies. Having your finances in order is not just about having that emergency fund for a big, unexpected payments or paying your monthly bills as they come due. It’s about crafting a long term, fulfilling lifestyle of stability, choice and freedom.
In this post, we explore:
- Why finances and wealth are fundamental for designing and living your uniquely fulfilling lifestyle.
- Why you should build wealth and become an avid steward of your wealth as soon as possible.
- Finally, I share practical steps to get you started.
Financial Stability Equals Freedom To Choose
On 1st January 2025, The Dutch tax authorities started enforcing the Employment Relationships Deregulation Act (DBA Act). This law makes being a freelancers (at least in the sense of having a short term contract as a self-employed person) within an organization where they similar roles on permanent contract virtually impossible. This meant that freelancers working in all sectors of society suddenly had to start looking for jobs and enter permanent contracts with all the benefits that come with that.
These permanent contracts are a huge financial blow to the those who were previously self-employed. One of the impacts is that freelancers are no longer able to negotiate for their hourly rates in the same manner as before and they now must pay all the social taxes that where previously an option for them. This results in a significantly lower wage after taxes for the previously self-employed. Furthermore, freelancers now must decide on their professions: if it’s no longer about the money, which job would they find fulfilling?
Faced with these life altering conditions, those without financial stability are limited to choose a career that will provide for them. Compared to those that have financial stability, they have the freedom to take their time, perhaps fund their own sabbatical and look for a profession that will be suitable for their lifestyle and what matters most to them.
A fulfilling life is built on choices such as where you work, the neighborhood and house you live in, if you drive a car, bicycle or public transport, how you spend your time. When you have stability in your finances and have arranged your finances orderly, you are fortunate because this gives you the power of choice. You escape the dread of life happening to you and leading you to make decisions out of fear or sense of survival.
Wealth as a tool, Not a goal
Many people make the mistake of setting goals at the beginning of the year. The gravest of these mistakes is placing one of the goals as: to achieve wealth. This is a grave mistake because then you misunderstand the true nature of wealth. Wealth is a tool to support your values, aspirations and lifestyle. Wealth enables you to invest in your health, relationships, lifestyle pursuits such as travel and exploration, all the things that make life meaningful.
For example:
- If you want to focus on a passion project such a growing your own food. You need financial resources to buy the seeds or seedlings, planting trays, gardening tools and perhaps a greenhouse for overwinter gardening.
- If you want this year to be the year you focus on health and self-care: You need the finances to join a sport club where you can do activities like swimming or play tennis, join a gym, buy the sports clothing or invest in eating nutritious meals.
Whatever aspirations you have for the lifestyle you want to live, having financial stability as the foundation of your wealth is the underlying bedrock that gives you the ability to pay for your uniquely fulfilling lifestyle.
“Setting up Clarity in your finances goes a long to free up mental energy”
The Power Of Starting Early
We have all heard the saying that time is money. Perhaps this saying is as old as money itself. Most people derive only one meaning for this saying. Which is that with each passing moment, you could be earing money thus time is valueable. Most people miss the other meaning, that time is the most important factor when building wealth because of the power of compounding interest.
Compound interest makes investing early worth your while, even if you start investing only small amounts. For example:
- Investing $100 a month starting at the age of 25 could grow to over $100 000 by the time you are 65 if you assume 7% annual return. If you wait 10 years to start this investment would half the potential growth.
Building wealth early cascades into all factors of your lifestyle when you later in life. You could decide to retire earlier or have the flexibility to switch to a passion profession as mentioned earlier, start a business or take a long-term sabbatical to travel the world. An early start to building and managing your wealth, sets you up for long term financial success, stability and freedom. However, starting early in building wealth would be impossible without first achieving financial stability.
Financial Stewardship as a form of self-care
Financial stewardship is responsibly managing your money and resources to ensure long term financial health. This starts by getting your finances organized. Because, when your finances are responsibly managed, you reduce anxiety over unexpected expenses you may have to pay. This has the follow-on effect of providing you with peace of mind.
Think about the last time you were having a good time with your friends or family. Did your worry about who will pay the bill or other financial worries cloud your ability to fully immerse yourself and enjoy that moment?
Setting up clarity in your finances such as:
- creating a budget,
- ensuring that your emergency fund keeps up with inflation. Use the LyfStled Emergency Fund Calculator to determine how much you need to have saved at any stage of your life. Or
- follow an investment strategy that has proven to provide favorable return on investment.
All these finance clarifying steps go a long way to free up mental energy.Each moment that you spent not worried about the gamble you took with your money instead of following a sound investment strategy is a moment that you can dedicate to self-care and focus on what truly matters. Financial stewardship and wealth management ensures that you are prepared for the future, while being able to fully immerse yourself and enjoy the lifestyle you have built.
Practical steps to get started
- Assess your current finances: You can download the free financial statement we have created here. Use it to track your income, expenses and savings. This will help you get a clear picture of your finances. Are you loss making on a monthly basis, living paycheck to paycheck or financial stable.
- Create a budget: Assess what you are currently spending your money on. Is this aligned with your values, priorities and aspirations? Are you spending money on building the lifestyle that you find meaningful?
- Build an emergency fund: Once you have assessed your finances, simply calculated how much you would need if you had to pay all your expense 6 months in advance. Or use the LyfStyled Emergency Fund Calculator to determine how much you need to have saved at any stage of your life. Then start saving that amount. A bonus tip is to reassess this amount each year and adjust with inflation. There’s no point in hitting your 6 months’ worth of expenses emergency fund and then having a rude awaking when the funds barely cover those emergencies due to the inflationary rise of costs.
- Start investing: As said above, start early even if you start with small amounts. Compound interest will do the rest.
- Educate yourself: Join our newsletter and more about personal finance, wealth building strategies and wealth management.
