Defining sufficient: how much money is enough?

Do you know how much money is enough for you? You can only figure that out if you know what living a sufficient life looks like for you.

If we want to be happy and fulfilled beings, we need to ensure we’re defining how much is enough in our lives.

My company Sufficient Funds was born on the back of a road trip many years ago. It was “insufficient funds” all the way back then; road-tripping, surfing, drinking goon sacks and studying(?)… not a care in the world.

The flip to “sufficient” rapidly developed during my early years as a financial planner. I saw many examples of people who were controlled by money, without determined action in line with what they truly valued. They were essentially wasting their lives and setting themselves up for major regret down the track.

I realised this isn’t an easy concept to grasp for most people, especially when money is involved. I spend my working life providing people with the all important link between money and life, so they can use it to their advantage.

Defining what “sufficient” is in your life is the first step.

Sufficient is different for everyone

We all have different ideas of what’s important in life, but have you thought about how much is enough?

Think about a scale or continuum that ranges from insufficient to sufficient. Where you sit on this continuum will change at different points in your life. You won’t find this scale in a textbook and it’s unique to everyone.

You need to define this scale before you define what you’re working towards. Once you’ve done this, you can link your money plan to it because you’ll know far better how much money is enough for you.

There is only one question you need to ask yourself here: what did your parents want you to be?

Okay jokes… please…. I’m sure your parents did a fantastic job raising you, but let it go. Richard Branson’s parents only ever gave him advice when he asked for it. This is a great lesson for us all.

How do you define how much is enough for you?

Firstly, it’s not about the money. This isn’t actually about how much money is enough. Money is a tool you can use to achieve your sufficient life, but it’s the vehicle, not the driver.

Only you can determine what is sufficient in your life. You need to look internally and don’t compare yourself to others.

Identify what you value in life – whether it be material items, travel, adventure, time with friends and family, growing a family, party time, physical fitness, wellbeing, a legacy to pass on, success in career, making an imprint in a chosen field… whatever it is for you! Remember, this isn’t about what you should value, but rather what is actually most important to you.

Start by defining sufficient for you, then define your insufficient and look at where you are on the scale. It is only then that you can set truly meaningful financial goals that you’ll be intrinsically motivated to achieve.

Try these questions to get you on the right track:

• What excites you?
• Are you striving for minimalism?
• What do you lie in bed dreaming about?
• When are you in your element?
• What parts of your job do you enjoy?
• What did you do on that day where everything went right?

Decide what’s important, then make a plan

If you are determined and make a plan, it’s easy to avoid the scary picture of regret and remorse that I painted up top.

Knowing how much is enough starts with deciding what’s important. You need to trust your gut on this. Always be flexible and be happy to adapt when things don’t turn out the way you planned. Regularly revisit your position on the continuum, and hone your definitions.

The good news is that most people aren’t really driven by money. We just need to understand it so we can nail the major life decisions.

This is an edited version of an article that originally appeared on Sufficient Funds and is republished here with permission. This article contains general information only. This should not be relied on as independent finance or tax advice. If you are after specific professional advice, speak to your registered tax agent/financial advisor or reach out to James at Sufficient Funds.