The Lifestyle You Grew Up With Isn't Necessarily the Lifestyle You Can Afford
Series 5: How Much Is Enough?
Part 1: The Lifestyle You Grew Up With Isn't Necessarily the Lifestyle You Can Afford
One of the interesting things about growing up in a comfortable family home is that you rarely see the financial journey that made that comfort possible. You see the house, the holidays and the opportunities your parents have provided, but not necessarily the decades of work, saving, borrowing and difficult decisions behind them. By the time you're ready to establish your own life, that standard of living can feel like a natural starting point rather than something that took years to achieve.
For many young professionals, the transition into financial independence brings a rather confronting discovery. A reasonable salary doesn't necessarily stretch as far as expected, particularly when rent, transport, social commitments and everyday expenses begin competing with ambitions to travel, buy property and build savings. What seemed perfectly ordinary while living at home can suddenly become considerably more expensive when you're responsible for paying for it yourself.
There is nothing unreasonable about wanting a comfortable and enjoyable life, and I would be concerned if young people felt they had to abandon those ambitions altogether. What interests me is how easily expectations can get ahead of financial capacity, particularly when someone is only a few years into their working life.
Having recently finished my series How Much Is Enough?, which explored the financial and personal decisions people face as they approach retirement, I thought it would be worthwhile looking at the other end of the journey. In this new series, The Life You Want, The Future You're Building, I want to explore how decisions made much earlier in life influence the financial freedom we eventually have, and why enjoying the present and preparing for the future need not be competing ambitions.
The financial journey we don't always see
Every generation develops its own understanding of what constitutes a reasonable standard of living. For some of us, buying a first home meant accepting something modest, often in a location that was far from ideal, with the expectation that we might improve our circumstances over time. Furniture was accumulated gradually, cars were kept for longer, and major purchases generally required planning and patience.
That doesn't mean previous generations had an easier financial journey. Younger Australians face genuine challenges, particularly around housing affordability, and comparing generations without acknowledging the differences in property prices, wages and economic conditions achieves very little. I also don't believe that telling someone to stop buying coffee is a particularly useful response to the difficulty of saving a deposit in Sydney.
The more important point is that financial independence has always involved a progression, even if the nature of that progression has changed.
When someone leaves a family home supported by established careers and years of accumulated assets, they are effectively starting again. Their parents may have spent decades building financial stability, reducing debt and increasing their earning capacity, while the young adult is only beginning that process.
I don't think this is necessarily entitlement. More often, it reflects the environment in which someone has grown up. If financial comfort has always been familiar, the time and effort required to achieve it can be difficult to appreciate until you begin managing your own money.
Understanding that distinction is important because it changes the question from Why can't I afford the life I'm used to? to What do I need to do to build the life I want?
A good income doesn't automatically create financial freedom
One of the more interesting situations I encounter involves people who earn what most Australians would consider a good income but still struggle to make meaningful progress towards their financial goals.
Their difficulty is not necessarily excessive spending on any one thing. More often, it is the accumulation of commitments that seem manageable individually but leave surprisingly little room for saving or investing when considered together.
As careers progress and salaries increase, spending can gradually rise to match the additional income. The more convenient rental property, the upgraded car or the extra financial commitments may all be affordable in isolation, yet collectively they can absorb the very income that might otherwise have created greater independence.
Financial advisers often refer to this as lifestyle inflation, but I think the more important issue is what happens to someone's choices.
A higher income should ideally provide greater flexibility, whether that means saving towards a home, investing, reducing debt, pursuing further education or having enough financial security to change jobs without immediate pressure. When every increase in earnings is committed to additional spending, someone can become more successful professionally without making equivalent progress financially.
That is a distinction worth understanding early, because financial freedom is not simply a reflection of how much money comes in. It is also influenced by how much of that income remains available to create opportunities for the future.
The importance of choosing what matters
We live in a world where opportunities and experiences are constantly presented to us, often through social media and the lives of people around us. There is always another destination to visit, another event to attend or another experience worth considering, and it can be difficult to distinguish between something we genuinely value and something that has gradually become part of our expectations.
I understand the attraction of experiences, particularly when you're young and have the freedom to explore the world. Travel, friendships and personal interests are important parts of a fulfilling life, and I certainly wouldn't suggest that financial responsibility requires giving them up.
However, I think there is a difference between spending deliberately on things that matter to you and allowing your financial decisions to be shaped by what everyone around you appears to be doing.
Someone who genuinely values travel may be perfectly comfortable delaying a property purchase or living somewhere less expensive to make that possible. Another person may place greater importance on buying a home and decide that overseas holidays can wait for a few years. Both approaches can make sense, provided the person understands the consequences and is comfortable with the trade-offs.
The difficulty arises when we try to pursue every ambition simultaneously without considering whether our income can support them all.
One of the most useful financial skills is learning to prioritise without feeling that every choice represents a sacrifice. Choosing one opportunity over another is not necessarily missing out. Sometimes it is simply recognising that achieving something important requires giving it room in your financial life.
What parents can teach beyond providing financial support
Parents have an important role in shaping financial expectations, often without realising it.
Most of us want our children to enjoy opportunities that may not have been available to us, and if we can provide a comfortable home, a good education and memorable experiences, there is considerable satisfaction in doing so. Yet children can become familiar with the outcome without fully understanding the decisions that produced it.
They may know that their parents own a valuable property without knowing much about the earlier homes, mortgage repayments or periods of financial uncertainty. They may see established careers without appreciating the years of experience, setbacks and professional development involved.
I think there is real value in talking more openly about those experiences, particularly as children begin earning their own money.
Financial education doesn't always need to begin with investment strategies or complicated calculations. Sometimes it starts with understanding why a family chose to buy one property rather than another, how parents managed competing priorities or why they postponed certain purchases during particular stages of life.
Those conversations can help younger adults recognise that financial progress is rarely immediate and that the decisions behind an outcome are often more important than the outcome itself.
They can also be useful for parents who are considering providing financial assistance, particularly towards a first home. Helping adult children establish themselves can be enormously valuable, but it is worth considering whether that assistance also helps them develop the habits and understanding required to manage their finances independently.
We will explore that question in greater detail later in this series, because supporting the next generation financially involves important decisions for both parents and children.
Your greatest financial asset may still be ahead of you
One of the advantages of being in your 20s or early 30s is that, even if your savings balance is relatively modest, you potentially have many years of earning, learning and career development ahead.
For some young professionals, their greatest financial asset may not yet be their superannuation or investments, but their future earning capacity.
The decisions they make about education, professional development, relationships and career opportunities can influence their financial position for decades. Sometimes accepting a challenging role, developing a new skill or moving into a different industry may offer greater long-term value than concentrating exclusively on reducing everyday expenses.
That doesn't mean career progression is guaranteed or that everyone has the same opportunities. Employment conditions change, industries evolve and technological developments, including artificial intelligence, are likely to continue reshaping the skills employers value.
What matters is recognising that financial wellbeing involves more than managing the money you currently earn. It also involves developing the capacity to earn, adapt and respond to opportunities throughout your working life.
At the same time, building the habit of retaining some of what you earn can be just as important as increasing your income. Someone who develops a reasonable savings discipline early may find it easier to make use of future salary increases, rather than automatically absorbing them into additional commitments.
The combination of growing earning capacity and maintaining financial flexibility can be particularly powerful over time.
Building a life you can afford to keep
I think financial conversations with younger Australians sometimes become unnecessarily divided between two extremes. On one side is the suggestion that they should save aggressively, avoid unnecessary spending and focus almost entirely on entering the property market. On the other is the argument that housing is so expensive and the future so uncertain that they may as well enjoy their money now.
Neither approach is particularly helpful if it prevents people from making decisions that reflect their own circumstances and priorities.
For someone beginning their career, financial independence might initially mean building an emergency reserve, managing debt and developing the confidence to make choices without relying on family support. A few years later, the priorities may shift towards property ownership, investing or establishing a family. The important thing is not necessarily achieving every milestone at a particular age, but understanding how current decisions influence the options available later.
Two people can begin their careers on similar incomes and find themselves in very different financial positions ten or fifteen years later. That difference will not always be explained by discipline or spending habits, because career opportunities, family circumstances, health and economic conditions also play significant roles. Nevertheless, the choices people make about their financial commitments, savings and professional development can have a meaningful cumulative effect.
That is what I want to explore throughout this series. Not whether one generation has had it easier than another, or whether young people should stop enjoying themselves, but how we can make better-informed decisions about the future we are building.
The lifestyle you grew up with may have been the result of your parents' financial journey, and there is nothing wrong with wanting something similar or even better for yourself. But your starting point is different, and so are the opportunities and challenges you face.
You don't need to reproduce somebody else's finished lifestyle in the opening years of your own working life, nor should you feel that every enjoyable experience must be postponed until you have reached a particular financial milestone.
What matters is recognising that the decisions you make today are shaping more than your immediate standard of living. They are also influencing the freedom, opportunities and financial responsibilities you will carry into the years ahead.
Perhaps the most useful question is not how quickly you can afford the life you want, but whether the choices you are making will help you build a life you can continue to enjoy and support well into the future.
In the next article, I'll explore how everyday spending decisions accumulate over time, using practical comparisons to illustrate why two people with similar incomes can end up with very different financial outcomes.
Next in Series 5: Part 2, Champagne Taste, Beer Budget: The Choices That Shape Your Financial Future.