209 // 3 Components to Financial Success

Mar 28, 2023

A clear breakdown of three core money principles: setting freeing boundaries, keeping balanced priorities, and building accountability. Short explanations show how lifestyle caps, intentional spending, and simultaneous goal funding work together. Practical tips encourage conversations with family and using financial professionals for ongoing support.

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ADVICE

Set A Clear Lifestyle Cap

Draw a lifestyle cap to define how much you will spend, save, and give each year.
James Lenhoff says this boundary creates confidence and contentment by letting you enjoy life without overextending yourself.

ANECDOTE

Loosening Austerity Lets Clients Enjoy Progress

James recounts moving clients from austerity toward enjoying life by adjusting overly strict boundaries.
He notes he often suggests loosening extreme self-denial so clients can actually enjoy the life they planned.

INSIGHT

Use A Spending Plan Not A Restrictive Budget

Prefer a spending plan over a restrictive budget so you intentionally choose how to live inside your boundaries.
James argues celebrating intentional spending is more sustainable than high-fiving yourself for restrictions you never enjoy.

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James is going to talk about the three things you need in order to live a financially successful life. There is so much complication when it comes to money, but we can really simplify it down to boundaries, balance, and accountability.

Boundaries can feel like a limitation, but they can actually be deeply freeing if done correctly. We need a financial balance. Over emphasizing one thing and neglecting everything else will create an unbalanced financial life. We need accountability and conversations with others to create boundaries and balance.

Episode Highlights:

[02:23] Boundaries: In order to have a financially successful life we need to have boundaries. These boundaries are dependent on your situation in the state you live in. There aren't really hard and fast rules.

[03:08] Ideally you give yourself a boundary and draw your lifestyle cap, and then the rest of the money can go into savings and investing.

[04:26] Creating a frame around us allows us to be safe and have the confidence to enjoy what we have.

[06:54] Balance: Don't overemphasize any one thing. Spending all of your resources in one direction can leave you in a situation where you're unprepared, or you haven't saved enough.

[08:11] Don't be overfocused on one thing like debt reduction and neglect other things like your 401K or other sensible financial actions.

[08:57] All of our goals are saved simultaneously even though they occur sequentially. This creates a challenge when balancing our finances.

[10:39] Accountability: It can't happen in a vacuum. When establishing boundaries you need accountability.

[12:05] Begin your journey of accountability by having conversations with your spouse or even checking in with your kids.

[14:07] The most valuable piece of your financial community is having a financial advisor to help you create and keep a plan to do what you need to win financially.

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