The Importance of Aligning Your Spending with Core Values & Escaping The Trap of Upgrading

Key Takeaways escaping the trap of upgrading

• Align spending with your core values. Money decisions should reflect your personal priorities.

• Hidden costs can add up quickly. Bigger homes and vacation properties usually have additional unexpected carrying costs.

  
  

“Comparison is the thief of joy” – Theodore Roosevelt

In the pursuit of success, many people fall into a quiet but dangerous trap. They feel they must constantly upgrade their lifestyle. However, despite these upgrades, many never feel truly satisfied. The key to avoiding this trap is to take time to reflect on what is important in your life. Make sure your personal values drive your financial decisions.

Understanding Wealth and Lifestyle Changes

Many clients come to us near their peak earning years. Often, they’ve recently sold a business or received a big promotion. They may have new equity compensation or a financial windfall. They are unsure about how to handle their new level of wealth.

I’ve learned one important lesson over my career: just because you have more money doesn’t mean you should change who you are. More money presents different opportunities. However, if it isn’t spent or saved consistently with your core values, it won’t bring you more satisfaction or happiness.

I’m not necessarily talking about running out to buy a new toy or joining a certain club. These purchases often represent lifelong dreams and can be incredibly satisfying. The bigger challenge is upgrading everyday expenses. Every upgrade raises the baseline and creates a “new normal.” This can be hard to sustain and easy to resent. Many of our new clients have no idea how much they spend monthly. They are shocked when we calculate the amount for them.

Navigating Competing Values in Relationships

Another challenge we see is that many couples have competing values and priorities regarding money. One spouse may be a diligent saver, while the other wants to enjoy life now. They may spend on experiences as much as on material things. In this situation, we help them get things out in the open as part of our goal planning.

I find that if a couple has a specific savings plan in place, and if they’re confident that their core retirement goals are being met, this provides freedom for the spouse who might be reluctant to spend. This discipline also sets boundaries for the spouse who is more apt to spend. It ensures that their savings goals are met first and that the financial plan is secure before making lavish purchases.

More Does Not Equal Better

Housing is one of the biggest areas where we see people falling into the upgrade trap. With extra money in their pockets, they often move into a bigger house in a nicer neighborhood. However, they focus only on the purchase price, which seems manageable. They don’t consider the higher carrying costs, including property taxes, maintenance, and insurance. As those bills roll in, people can experience buyer’s remorse.

The same goes for buying a vacation home. It’s great to have a house at the beach, but it’s easy to overlook the maintenance costs associated with having a home near salt water. There are many hidden expenses associated with vacation housing that can add up quickly. These should be considered carefully when constructing a financial plan.

Freedom Lives In Knowing Your "Enough"

Once our clients reach the level of wealth needed for their plan to be successful, I’m happy to inform them: “Work is now optional for you.” It’s a powerful statement. It means you’ve accumulated enough to achieve your goals at your current level of wealth. You don’t need to keep grinding and telling yourself: “I have to save more.”

I want people to take a step back and see the big picture. They should ask themselves: “Do I still enjoy my profession?” If they do, that’s great. They can continue to work and push forward with their passion. However, when clients first realize that work is now optional, it creates the opportunity to step back and say: “All right. I've accumulated enough in savings. What changes do I want to make in my life, if any?”

When work becomes optional, it’s rewarding for me as an advisor and exciting for clients. They start to feel like kids again, except with money and the freedom to do what they want. They’re free to pursue interests, volunteer for charity, or take up a hobby they had to set aside during their working years.

The Cost of More Isn’t Just Monetary

When successful people reach a certain point in life, time and health become more important assets than money. You may be earning more than you ever dreamed, but if you’re commuting an hour and a half each way to work, there’s the “opportunity cost” of not being able to spend time with your loved ones.

There’s also the mental and physical toll that a high-stress job with long commutes and business travel takes on your health. The expectations of constantly needing more can create unnecessary anxiety. It’s easy to get caught up in the inertia of doing what you’ve always done. You may feel like you spend a ton of money each month but aren’t sure where it is going. That doesn’t bring you joy.

Having a financial plan that allocates your money in a way that’s consistent with your values is a better way forward.

Conclusion

Escaping the trap of upgrading starts with recognizing that good planning isn’t about having more—it’s about living better. When you simplify your lifestyle and align spending with your values, you’re more likely to experience lasting happiness and peace of mind. If you're ready to take a step back and refocus on what truly matters, I’m here to help you review your financial plan or life goals.

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RYAN M. VOGEL, CFP® is the CHIEF PLANNING OFFICER, PARTNER at Novi Wealth*