While most of society is constantly on the lookout for “more”, and how we can leverage our roles, income, or situation to achieve better long-term outcomes; more I’ve been asking “what are you willing to give up” when it comes to meeting financial goals, especially in getting ahead for the long term.
Claire Williamson
Don’t get me wrong, I’m a fan of leverage just as much as the next person (it’s one of my favourite words), and every day I’m looking for ways to improve the way I do business and life, but in many discussions with clients recently I’m asking what they are consciously willing to let go of to allow their lives to move forward.
Dual income vs more family time
As two-working-parent families have become more common, more families with young children have to make the call as to whether to have one partner stay at home for a time, return to full or part-time work, or for family and friends to help out. Inevitably this has an effect on the family budget, and hence the amount of money they can borrow for upgrading a home or purchase of an investment property.
Downsizing to upsize investments
A very common conversation is for a mid-life, professional couple with a young family to have upsized to a larger home while interest rates were cheaper following Covid, and now have great equity but their affordability to invest in rental property is limited because their own home required fairly hefty borrowing which is now costing more. Some of these couples are sizing down slightly to leverage their equity position into a second property, business, or other income-generating asset, and therefore moving themselves closer to their financial goals.
Lifestyle adjustments
The key catch cry in lending over the last two years has been the dreaded CCCFA, which for some families shone a light on frequent takeaways, dining out, and retail spending. Adding this to some of the cheaper money available post Covid and many families got used to upgrading their car more frequently, summer toys like boats and caravans, and luxury holidays. With a squeeze on interest rates in the last few years, borrowers have since been asked to choose – “would you rather that upgrade on your vehicle, or to invest that money for the future”?
While delayed gratification isn’t always a whole lot of fun, my advice is to make this an active decision and think about what you’re moving towards – a secure future, a special family trip, or perhaps a business or investment that supports your needs into retirement.
Your financial journey will require some level of thoughtful trade-offs, and what’s important is different for everyone. Think carefully about your goals, enlist an expert to help, and be clear on what you want your financial future to look like.
Because achieving your own kind of freedom isn’t about giving up everything – it’s about making deliberate choices that allow you to live the life you want.
Claire Williamson
