You can raise your standard of living with debt; you raise your quality of life with discipline. And we like debt more than discipline. – Andy Stanley
I was listening to Andy Stanley on his Your Move podcast and it ended up being one of those life-changing episodes (he’s so good)!
The premise of the episode was that “a higher standard of living does not lead to a higher quality of life.”
Here’s a look at exactly what Andy Stanley talked about and why it was so good.
We’re Taught To Reach For A Higher Standard Of Living
All our lives, we’re taught to believe that a higher standard of living leads to a higher quality of life.
The marketing, advertisements, and even our friends and family who have more and better things than we do make us feel like we need to have more stuff and better stuff in order to have a better life.
But that’s not true.
A better job, a better car, a better house, a better school, a better neighborhood does not mean a better life.
More money, more success, more clothes, more stuff does not mean a better life.
You Already Know This Concept Is True
I’m guessing you aren’t shocked to hear this. You probably already know based on your own experience that a higher standard of living does not lead to a higher quality of life.
You have most likely experienced a higher standard of living than you once had, and it did not lead to a higher quality of life.
I know this is true from my experience practicing law. I had a prestigious job, making six figures, and was constantly around highly educated, successful people. While I still had student loan debt, I certainly had achieved a higher standard of living and moved up the socioeconomic status, if you will. But as you already know from how much I talk about it, my quality of life was awful. I was always stressed, worked nights and weekends, and never had time to enjoy life. I hated it. My quality of life was terrible. (Here’s my full story of quitting my job.)
I gave all that up and started a new career, taking a 50% pay cut. I had to downsize by moving into a really crappy apartment that I think looks like a jail from the outside. I also live very frugally and put 50% of my income to my student loan debt. And I spend nights and weekends trying to make more money blogging so I can repay my debt (more on how I make money blogging here). Yet, I am so much happier. I have margin in my day, in my finances, and in my life.
I have these things because I made a conscious choice to lower my standard of living to enjoy a higher quality of life. I’m happier and have a higher quality of life despite having a lower standard of living. Quite a better trade off if you ask me.
If this is true, and a higher standard of living doesn’t lead to a higher quality of life, why do we live like this – paycheck to paycheck, aiming for more income and more spending and a higher standard of living?
Then Why Do We Live Paycheck To Paycheck?
How many times have you thought “if I had a little bit more money every month, everyone would be fine.”
Why do we do this to ourselves?!
The answer: Because we allow our lifestyle to stay in sync with our income.
Regardless of how much money we make, we always think we need to make a little bit more.
We don’t make room for financial margin in our budget.
This is most how most of America lives – above their means, stressed about money, and a slave to the banks and loan servicers.
When you live like this, you live in a world of “can’t.” You can’t go there, you can’t eat there, you can’t vacation there, your kids can’t go to that school, and on and on. Your car payments, your mortgage, your credit card debt – they’re all running your life and you can’t do what you want to do. You can’t fund your dreams. You can’t fund your children’s dreams. You have so much worry around your finances.
It’s enormous pressure. And usually more money doesn’t solve this. It makes it worse because you know how hard it is to replace a high income.
I write a lot about making more money on my blog. I do this because I need to make more money to repay my student loan debt (more on how I paid off $100k here). But that debt was from my education. I’m not constantly getting into more debt and increasing my standard of living (in fact, I’ve never had a credit card).
I’m doing the opposite — lowering my standard of living so I can create more financial margin in my life, all while increasing my income to repay my enormous student loan debt. This is different than if I was constantly aiming to increase my income only to increase my standard of living.
The key is not that you shouldn’t make more money or want to build wealth. The key is not to focus on increasing your income solely so you can increase your standard of living. Because if you do that, you’ll probably find you won’t have a higher quality of life.
How To Have A Higher Quality Of Life
To have a higher quality of life, don’t make your goal a higher standard of living.
Instead, focus on what actually creates a higher quality of life for you. This may be stronger relationships, better health, connecting in your community, or something else. Use my Goal Setting Action Plan to help you figure out what it is that will actually increase your quality of life.
If you are super stressed and strapped financially, it’s going to be hard to have a higher quality of life. The point of this post is to help you shift your focus away from wanting a higher standard of living as the end goal. Instead, a higher quality of life, and all the peace and happiness that comes with it, should be the goal.
To do this, there needs to be space in between how much you spend and how much you make.
You can decide how much margin you need. Whether it’s 2%, 5%, 10%, or 25% matters less than the fact that there is some room for margin between your spending and income.
Start by budgeting and reading personal finance books.
If you don’t budget yet, here are my best budgeting resources to get started:
- Budgeting for Budget Haters (a budgeting course)
- The Real Life Money Plan (a money-planning course)
- Budget Spreadsheets (the budget templates I use)
- 21 Days to a Better Budget (a budgeting eBook)
I also recommend reading these five personal finance books to learn the basics of personal money management.
So, why is it important that you budget and create financial margin in your life? Because you will feel less stressed, you will have more peace, and you will have a better life when you have breathing room in your financial life.
The lesson here is don’t allow your income to drive your financial spending. Instead, make room for financial margin. Then, you can focus on enjoying your life instead of increasing your standard of living.
The result is that you will be happier and have a higher quality of life.
A Final Note!
Although we often believe that a higher standard of living leads to a higher quality of life, it’s just not true.
By focusing on creating financial margin in your life (start by reading personal finance books and budgeting), you will set yourself up for less financial stress, more internal peace, and ultimately a higher quality of life.
And that sounds a.ma.zing. 🙂