We all want to live nice lives, heck, more than nice. We all have a vision of what a “great life” would look like for us. It might have a splash of luxury, or a deep sense of comfort. It might focus on travel, on spending a lot of time with loved ones, or on pushing into a certain hobby.
We come up with words to explain what we want: Standard of Living, Lifestyle, and Quality of Life. And many times, we think those terms are interchangeable, but in reality, they represent distinct aspects of our daily experiences and overall fulfillment.
Recognizing these differences is essential for making intentional choices about how we live, what we prioritize, and how we manage our finances. So, let’s dig a little deeper, starting with defining our terms.
Standard of Living: This is primarily a financial measure, reflecting how much it costs to support a particular way of living. It is determined by income, assets, and expenses, influencing what people can afford.
- Lifestyle: Lifestyle encompasses daily activities, relationships, and the rhythm or pace of life. It is about how we choose to spend our time and engage with the world around us.
- Quality of Life: Quality of Life is the most holistic of the three, representing a sense of fulfillment, wellness, and contentment. It is deeply tied to appreciation, gratitude, and meaningful connections.
The Myth of Wealth and Happiness
Many assume that a high standard of living automatically leads to a great lifestyle and, in turn, a fabulous quality of life. However, real-world examples prove otherwise. Media stories are filled with anecdotes about wealthy individuals struggling with personal challenges and dissatisfaction. It’s a common human experience to see the “haves” not having what they need to fill them up at our core, showing that money alone does not guarantee fulfillment.
On the other side, there are folks with modest means who experience a high quality of life. They walk around with a sense of joy, a sense of peace and fullness. Perhaps, they derive deep satisfaction from their relationships, purpose, and daily experiences. While having financial resources can enhance one’s lifestyle and contribute to quality of life, it’s clear this is not a guaranteed formula for happiness.
Why This Distinction Matters
People often work tirelessly to accumulate wealth, believing it will lead to a better life. They can work and work to gain more and more, to “keep up with the Jones’” and end up at the top. However, wealth primarily influences standard of living—how much can be spent on material goods and services.
To achieve true quality of life, individuals need to take a strategic approach by first defining what fulfillment looks like for them and then aligning their lifestyle and financial decisions accordingly.
Reverse Engineering Financial Goals
Most people determine their lifestyle based on their income, thinking, “What can I afford?” Instead, a more effective approach is to reverse this process. It starts with an individual reflecting on these questions in order:
- Define Quality of Life: What does a fulfilling life look like for you?
- Determine Lifestyle: What daily rhythms, activities, and relationships support that fulfillment?
- Establish Standard of Living Needs: What level of financial resources is required to sustain this lifestyle?
Interrelationships Between the Three
After parsing our terms and considering what is at the core, it’s helpful to review the connection between these three parts of living:
- Standard of Living and Lifestyle: A great lifestyle can exist at various levels of standard of living. Financial resources may enhance one’s lifestyle, but they are not the sole determinant.
- Lifestyle and Quality of Life: A well-balanced lifestyle can contribute to a higher quality of life, but fulfillment does not necessarily require a luxurious lifestyle.
- Standard of Living and Quality of Life: A basic standard of living is necessary for meeting fundamental needs and providing financial stability. However, beyond this point, excess accumulation has diminishing returns in terms of overall quality of life.
Achieving the Highest Quality of Life
People experience their highest quality of life when their daily experiences align with their deepest values. True fulfillment comes from living in accordance with what they cherish most—whether that be relationships, purpose-driven work, or personal growth. Fulfillment, rather than mere enjoyment (as desirable as it is), is the key to lasting well-being.
Challenging Traditional Financial Assumptions
The financial services industry often focuses on increasing wealth and achieving financial security. While these are important, financial planning should also consider alignment with personal values and life goals.
At a certain point, once basic needs and some discretionary income are secured, accumulating additional wealth has little impact on quality of life. The real question becomes: How can financial resources be used to support what truly matters?
The MaxAMAZING™ Approach
The MaxAMAZING™ system, through the Bringing Your Money to Life process developed by Dedicated Financial, emphasizes aligning financial resources with what is most important to individuals. By first identifying core life priorities and then structuring financial decisions around them, individuals can create a fulfilling and sustainable life track.
Final Thoughts
Understanding the distinctions between Standard of Living, Lifestyle, and Quality of Life allows individuals to make more intentional choices. Rather than simply striving for more wealth, a more meaningful approach is to define what fulfillment looks like and strategically align financial and lifestyle decisions to support that vision. True happiness comes not from financial status but from living a life rich in meaning and connection.
