The Lifestyle Bucket

Amyr Rocha Lima

1/16/20232 min read

When it comes to managing your wealth, it's important to have a plan in place to support your lifestyle and spending needs.

This includes setting aside resources and investing appropriately to meet the expenses and desires that you and your family have over the course of your lifetimes.

A Framework for Your Lifestyle Bucket

One way to do this is through the use of a "lifestyle bucket" in a goals-based financial plan, which is separate from the "liquidity bucket" that covers operating expenses, near-term large purchases, and opportunistic investments.

Consider the various components of your spending when creating your own lifestyle bucket. This includes personal expenses such as food and luxury items, as well as family expenses such as gifts or education costs. It's also important to consider your charitable contributions and any charitable bequests you may want to make.

Also consider factors such as the desired pound amount, time horizon, and priority level when determining specific goals within each spending category.

It's also important to consider any potential changes in your lifestyle needs over time, as well as how certain you are that you'll be able to meet those expenses.

In addition to setting specific goals, there are several strategies you can use to invest your lifestyle bucket. These include diversifying your investments, employing tax-advantaged strategies, and collaborating with a financial planner to create a comprehensive financial plan that aligns with your objectives.

When it comes to investing the bucket that will eventually support your lifestyle, it's also important to be aware of common behavioural biases that can influence your decision-making process. These can include a proclivity to focus on short-term gains or a desire to avoid losing money, both of which can lead to rash or irrational decisions.

Final Thoughts

Overall, by being deliberate and planning ahead of time, you can build enough assets in your lifestyle bucket to position yourself to maintain your desired lifestyle now and in the future.

Working with a financial planner and considering the various components of your spending and investment strategy can help you lay a solid foundation for financial security and the confidence to deal with whatever life throws at you.

For a more detailed discussion on this topic, please feel free to contact us. Our team are always available to answer your questions and to help you with any of your financial planning needs. Here’s what we offer: A cup of coffee… and a second opinion.

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Anne Client Stories Chartered Financial Planner Strategic Wealth Partners

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