How to Differentiate between Managing Lifestyle and Living Costs
Many people think that managing their lifestyle is the same as managing the cost of living. Even though these two things a... See more
How to Differentiate between Managing Lifestyle and Living Costs
Many people think that managing their lifestyle is the same as managing the cost of living. Even though these two things are different. If you don't differentiate, you could feel like you're thrifty even though you're still wasteful, or conversely feel stingy even though you're just setting priorities.
Here are the differences:
1. Basic Understanding
Managing your lifestyle means choosing the way of life you want to live. It's a matter of choice, habits, and values. For example: prefer hanging out in cafes or cooking at home, using motorbikes or public transportation, shopping for brands or local brands.
Managing living costs means controlling how much money goes out to meet daily needs. It's about numbers, budgets and expense items. For example: food budget 1.5 million, transportation budget 500 thousand.
In short, lifestyle = what kind of life you want to live. Cost of living = how much money you need to live.
2. Main Focus
Set a lifestyle focused on quality and satisfaction. The goal is to make life feel comfortable and in accordance with one's values.
Managing living costs focuses on quantity and efficiency. The goal is that expenses do not exceed income.
3. Examples of Differences in Real Life
Example 1: Eating
Lifestyle: choose a healthy diet by cooking for yourself 5x a week.
Living costs: allocate a food budget of 50 thousand per day.
Example 2: Entertainment
Lifestyle: likes watching movies and hanging out with friends.
Living costs: replacing the cinema every week with watching at home and hanging out at friends' houses. The entertainment budget is set at 200 thousand per month.
Example 3: Transportation
Lifestyle: don't want the hassle and prefer to take online motorbike taxis.
Cost of living: limited transportation budget of 300 thousand per month, so you have to join your business and use your own motorbike.
4. Final Goal
Managing your lifestyle aims: living according to the best version of yourself without following trends.
Managing living costs aims: stable finances, having savings, and not digging holes to cover holes.
5. Impact if not differentiated
If you only manage your living expenses but don't manage your lifestyle, the result will be that you will feel miserable. Everything is trimmed, the end is a big shopping revenge.
If you only manage your lifestyle but don't manage your living expenses, the result will be that you live a good life but your account runs dry at the end of every month.
6. How to Align the Two
Step 1: Determine the lifestyle you want. Write down 3 important values. Example: healthy, thrifty, productive.
Step 2: Calculate the cost of living based on that style. How much do you need for healthy eating, transportation, housing.
Step 3: Match with income. If the cost of living is greater than income, then your lifestyle must be adjusted. Not forced.
Step 4: Create boundaries. Example: a lifestyle likes drinking coffee, but living expenses are limited to 2 times a week.
Conclusion
Managing your lifestyle is a matter of choice. Managing living costs is a matter of calculating.
The two must go together. First determine a realistic lifestyle, then adjust your living costs so that this style can be maintained long term.
Don't let your style exceed your costs. But also don't let your costs force you to live without your values.
Which do you now control more often, lifestyle or cost of living?
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How to Differentiate between Managing Lifestyle and Living Costs
Many people think that managing their lifestyle is the same as managing the cost of living. Even though these two things a... See more
Many people think that managing their lifestyle is the same as managing the cost of living. Even though these two things a... See more
