Most of my clients have said this to me at some point in our work together. You may have said it or thought it yourself.

Couple-BillsShelley and Brian were frustrated with juggling hockey fees, camp dues and property taxes in a month where the business revenues were lower than they had hoped. They decided it was time to get their money sorted out once and for all.

They said to me “We make good money, I don’t understand why we are always struggling – we don’t live an extravagant life …”

I said … yeah you do. I wasn’t being mean – I was being honest. defines extravagant as: Lacking restraint in spending money or using resources; Exceeding what is reasonable or appropriate

Shelley and Brian aren’t alone. Forty percent of Canadians are living an extravagant life. – they are spending more than they are making. Another 20 percent live close enough to the edge that a late paycheque or a low revenue month makes them nervous.

Are you living an Extravagant Life? Find out by answering these three questions.

How much do we earn?
Be clear on how much income you are bringing into your household. As a business owner, the total revenues you earn are not all available for your personal use. Taxes, business expenses and business investment must be accounted for.

How much do we spend?
Be clear on what your life costs. Consider not only the monthly expenses, but the fixed and variable expenses that come up during the year. Items like car repairs, gifts, gas and spending money for trips to the in-laws, vet bills and kid’s activities can get missed if you use a monthly tally of expenses.

What do we owe?
Take a look at your debts. If they are increasing regularly, you are likely overspending, evidence of an extravagant life.

If you have more going out than coming in or your debt is increasing you are probably living an extravagant life.  There are two ways to deal with it. Spend Less or Earn More. As a business owner, you have the capacity to Earn What You Want To Spend. Decide where you will make changes so you can create the life you want and build your own Personal Wealth.

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Personal finance expert, Karen Collacutt is founder and CEO of Make Friends with Your Money. Karen works with ambitious people who are making good money but are wondering where it all went at the end of the month. She helps her clients to get clear on their money life challenges and opportunities, matching their money to their goals. They build a plan, confidence and peace of mind around their money.
Certified Money Coach and Certified Financial Planner, Karen brings over 15 years of finance and business experience to her clients. Coach, speaker, author and change catalyst for those ready to create a positive and empowered money life, Karen delivers a fresh perspective on how to make friends with your money.

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