Once you know what you have and what your lifestyle costs, you must then look at how you can protect this lifestyle. Protecting your lifestyle is a combination of many things;-
- If your current self has developed a lifestyle beyond your means then your future self will pay the price of this. Sometimes we need to be honest with ourselves if we want to preserve our lifestyle for the long term and over-spending puts our future lifestyle very much at risk.
- Events such as replacing a boiler, an expensive car repair or a family emergency etc. are all inevitable. If we don’t budget monthly for these then we may be forced into emergency sources of funding, which will impact the lifestyle of our future self. Sensible budgeting affords us better choices for the ‘inevitable’.
- Insurances for long term disability, serious illness, premature death are all things that should be considered to protect ourselves for events we can’t control.