Quality of life now or ETF for financial future

Hi Melanie.

It’s a good question. There’s a few ways you can approach it:

1- Pick a minimum investment amount you can manage and then happily enjoy the rest of your income. You’ll generally find that you will find a way to manage if you automatically remove a portion of your pay before you can spend it. Try to start small and then increase this over time as you get used to it.

2- Do a balance of both. Set aside a strict portion of ‘fun’ money and a portion of investment money from each pay. This ensures you don’t overspend and helps you balance both desires.

3- Prioritise what expenses are really worth it and what aren’t. Which of the things you do bring you the most absolute enjoyment and pleasure? Try to focus on these and optimise the rest of your spending so that you’re able to get the most benefits while still investing.

4- Think about the kind of life you want to have in 5-10 years, not just now. Do you want to be semi retired? Fully retired by a certain age? How much will you need to make that happen?

Generally, the more you can set aside for investing now, it will improve the quality of your life in the future, many times over. Because of investment returns and compounding, one trip away foregone now could mean 3 trips away later. So try to think about the tradeoffs there.

The following podcast might also help, it’s about balancing current desires + future goals: https://open.spotify.com/episode/0AlmswBDpU3l...

Hope that helps.
Dave

Hello and welcome to the investing world! It’s great to hear that you’re starting your journey with ETFs and are thinking critically about how to balance enjoying life now with preparing for the future.

Deciding whether to invest extra money or spend it on life’s pleasures like holidays and family outings is a common dilemma. The key here is finding a balance that suits your family’s financial situation and lifestyle preferences.

Many people approach this by ensuring they have a solid emergency fund first, typically 3-6 months of living expenses saved in a high-interest savings account. This provides a financial cushion and reduces the stress of unexpected expenses, like those associated with owning horses and managing private school fees.

Once you have your emergency fund in place, you can consider setting up a budget that allocates funds for both investing and leisure. This might mean setting aside a certain percentage of your income for investments, while reserving some for family activities and personal enjoyment. For example, you might decide to invest 20% of your monthly income into ETFs, save 10% for holidays or special purchases, and use the rest for regular expenses.

Investing even small amounts, like $100 a month, can significantly impact your financial future due to the power of compound interest. ETFs are a popular choice because they are generally low cost, diversified, and easy to manage, making them ideal for new investors.

At Pearler, we focus on helping investors like you make informed decisions that align with your long-term financial goals. Our platform is designed to support your investment journey, whether you’re setting up regular investment plans or tracking your progress towards specific financial milestones.

Remember, the right balance will depend on your personal circumstances and financial goals. It’s about making informed choices that help you enjoy the present while also securing your future.