Look at that lovely, frothy coffee above. For many of us, that’s an everyday necessity that gets us through the hustle and bustle of our demanding days. But is it really? Today’s Emma Fierce on Finance blog looks at weighing up our everyday life decisions (like having a coffee, or buying a Vogue magazine and working out whether those things are necessary…. or if they’re a luxury. In my experience  there are two ways in which families budget: the big things that have to be taken care of, like a mortgage, savings and major purchases –  and then there are weekly and daily expenses to consider, like groceries, fuel and school supplies. What happens when you have a lifestyle shift (like a child, or a dependant parent to take care of) and the ballpark changes? It’s time to then look at your budget, and see how you can achieve the things you’d like by making a few small changes to the ‘luxury list’. Let me explain…

This is a scenario which is relatively common, and one I successfully coach many couples through. They’ve had their baby (or their second), they have an investment property and would like another, but also want to put the kids through private school. To them it’s a question of choice – which one gets the chop? In my experience, most couples can do both – invest in their children and their own financial health – but they’re unwilling to make the lifestyle changes necessary to make it work. Morning lattes, glossy magazines and takeaway meals instead of homemade lunch can add up to $200 per week. Too many couples find cutting back on these luxuries too difficult – and actually endanger their future financial security because of it. They’ve gone from the comfort of being DINKs (Double Income No Kids) to taking on the responsibility of parenthood, and the necessary change of spending less on convenience can be painful.

One phase of life naturally gives way to another, and many families earn more than enough to tackle multiple major financial projects, be it investment property and private school, or a first mortgage and part-time education for a less established family. I can prove reprioritising a ‘luxury’ from an ‘essential’ works: I’m proud to say that my diligent Mother’s entire teaching wage put me and my siblings through private school while Dad paid off a farm loan at 18%. No luxuries for my parents, but hey, I’m worth it! (And so are you, your children, and your financial security.)