Lifestyle Choices Today Can Impact your Financial Future

Every day we’re faced with important life decisions, all of which could impact our overall financial well-being. From the house we live in to the car we drive and vacations we plan, choices should be dictated by financial strategies and long-term planning. Understanding which strategies to implement could lead to financial success and a certain level of comfortability.

Choosing the Right Home and Mortgage to Fit Your Needs

A home can be considered one of your most basic needs for survival. The kind of home you choose to purchase and the structure of your mortgage can have a major impact on your finances.

For many Americans, their home is one of their largest assets and purchases. As you move through the stages of life, it is a good idea to continually reassess whether or not your home meets your needs. Is your home still the size you need? Is it in the best location for you? Do the ongoing expenses of your home still fall within your budget. If your home is financed, do you have the best possible mortgage for your particular situation?

Working with a professional to understand how your choices could affect your mortgage, and further how mortgages are structures, could help you save money. For example, is a 15-year or 30-year mortgage right for you? Is a variable or fixed rate a better choice for you at this stage in life? Understanding your options and how they can affect your financial well-being could help your financial future. Your choices today may save you money that can be applied to your investments and pay dividends in the future.

Smart Choices About Luxury Items

A recent survey determined that 91% of Americans consider their car a necessity. (Pew Research Center) There is a major difference between a mid-range vehicle and a luxury car. Like any other major purchase, choosing how to fulfill your need of personal transportation can have a dramatic effect on your financial future.

Here’s a great example. According to Consumer Reports, the BMW 750Li and the Lexus 300h are both classified as luxury sedans. The MSRP on the BMW 750Li can range as high as $141,200. With a five-year cost to operate of $106,200, this car can cost it’s owner almost $250,000. In contrast, the Lexus 300h has a top MSRP of $39,500 and a five-year operating cost of $42,000. Ownership of the Lexus over a span of five years is just over $80,000. The difference in the cost of owning these two luxury sedans is approximately $170,000. Applied to your investments, this significant difference can impact your retirement lifestyle and financial legacy.

Leisure Activities that Meet Financial Goals

Many people enjoy leisure travel as a way to get away from their day-to-day and relax. Some people keep a second home or cabin where they spend their leisure time. However or wherever you choose to spend your leisure time, making good decisions can save money and help boost your investable assets.

The next time you are planning a vacation, assess the cost difference between renting a destination home or condominium versus staying in a luxury hotel. If you are one of the fortunate people who can afford a second home in a vacation destination, consider the expense of maintaining the home. Perhaps it makes sense to rent your home to short-term vacationers. Another option may be to invest in a shared ownership scenario rather than shouldering the total expense of a second home.

At Paradigm Financial Partners, we provide financial planning and timely advice that allows our clients to achieve their financial and lifestyle goals. It is through open dialogue and drawing from our wealth of experience that we are able to help our clients make sound financial decisions that align with their dreams. Before making your next major purchase, consult with your financial advisor.