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Insights on money, career and trading

Working With the Cost of Living

Posted on December 14, 2018 by Daniel at 10:47 pm

There are a lot of different ways that you can approach the idea of trying to live a happy and satisfying life. One of the best ways to think about that concept is within the notion of cost of living. If you know what your cost of living is, and then you compare it to where you live, how you live, and your income, you will get a pretty good idea of what your standard of living can be in the long-term.

So if you want to work with the idea of cost-of-living as associated with your personal finances, what steps can you take? First of all, you have to minimize your cash flow and budgets down to what is consistently reasonable. Beyond that, you can research the cost of living in different cities or countries. It’s also vital that you recognize how cost-of-living relates to jobs and housing markets. Finally, it’s important to think of the big picture rather than trying to micromanage certain aspects of daily life.

Minimizing Your Finances First

Have you minimized your life as much as possible? If not, then you’re going to have trouble figuring out the real cost of living. If you have excess factors financially or even in your business dealings, then you aren’t going to be able to accurately tell what cost-of-living is associated with what degree of happiness or satisfaction. You need to reduce everything to its bare structure before you can determine the appropriate personal finance transactions.

Research Cities or Countries

You may be familiar with the cost-of-living where you currently live. But what about other places? What is the cost of living in another city, another state, or another country? What is the cost of living in an urban area? What is the cost of living in Mexico? What is the cost of living in a rural state? If you figure out how to answer those questions, you’ll be able to figure out how those different numbers intersect with your income.

Recognize the Importance of Jobs and Housing Markets

As far as the cost of living and standard of living go, especially as they relate to finances, you need to think concerning the income from your job and how much money is going into and out of local housing markets. In different areas, people doing the same job make different amounts of money, and they can afford different styles of housing by proxy. Those two huge numbers play a significant factor in what kinds of things you can buy outside of your typical budget.

Thinking Big Picture

Finally, if you’re trying to work with the idea of cost-of-living, you always have to think about the big picture. The cost of living is not about how you feel right now. It’s about how you feel in general over time. You have to get rid of the highs and lows, and from that, you begin to see where your personal finances intersect with your ability to find meaning in day-to-day life.

Insights on money, career and trading