A couple of weeks ago, I (Dawn) saw The Real Cost of Living by Carmen Wong Ulrich recommended over at The Simple Dollar. I decided to pick it up from the library, and I’m glad I did! The Real Cost of Living is a great read.

 

Ulrich takes a look at many different aspects of people’s lives. Each chapter looks at the potential costs and benefits of the life changing decisions people make every day (buying a home, getting married or divorced, having a family, etc.). Ulrich examines each decision, and discusses what the impact could be on your life both financially and personally. Ulrich’s point is that many financial decisions have an impact on your personal life, and many personal decisions have an impact on your financial life. So, you must examine the costs and benefits on each side before making a decision to move forward.

 

The reason I like this book so much is that I completely agree with this concept. When making financial decisions, people often don’t consider how it will affect their personal lives. We see that a lot in financial planning. Just because a decision may make sense for you financially, doesn’t mean that it’s the right decision for your life. An example in the book is buying a home. If you are a person who would not enjoy putting the time and effort into maintaining a home for any reason, and feel buying a home would just cause you unnecessary stress and headaches, don’t do it! Even if you could easily afford to buy a home and it may make financial sense for you to do so, if you don’t think it’s the right decision in your personal life, it would only make you unhappy.

 

The same is true for your personal life. If there is something that you feel you need to do to be fulfilled in your personal life that may not be smart financially, it still may be worth doing. An example from the book (and one many people experience in their own lives!) is having children. You may never feel financially ready to have children, but if it’s something you need to do for yourself personally, it may be the right decision.

 

The Real Cost of Living is not a specific financial plan, but it can really make you think about how different things can affect your life. It’s a quick, easy read, and one that I would definitely recommend!

 

 

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