Financial Wisdom Live Beneath Your Means

You’re just out of college and have a job making more money than you’ve ever made before. You have all this extra money you don’t know what to do with. You rush out and buy the flashiest car you can afford, get credit cards, and buy the biggest flat screen available with all the trimmings. You have surround sound speakers, and get those "movie chair" recliners with cup holders in them for that "theater" feel. Who needs to go to the movies? Everyone just comes to your house for parties you pay for.

Sooner or later you find yourself having to work harder and longer hours just to keep up with your car and credit card payments. This might have felt like the way to live when you started out, but this is NO way to live. You end up spending so much time at work to pay for your lifestyle that you don’t get to enjoy your life.

Instead of spending that money on the flashiest new car or all the toys you might want to purchase, you should be working to reduce any debt you’ve incurred such as student loans. You can also use it toward adding to your savings. If you need a new car, get one. Just don’t get one with payments you can’t afford. Or better yet, buy a used car that's only a year or two old. The same thing goes with furniture. Get good-quality furniture that will last you a long time. Set short-term goals to pay them off in advance.

As the years go by and your hard work starts to pay for itself, you’ll get promotions at work and your salary will increase as well. As long as you live well beneath your means, you’ll always have excess cash flow. You can add to your savings so you can buy a home one day. You might also want to increase the contributions you make to the pension plan or 401(k) plan at work. Whatever financial goal you have, living beneath your means will give you the opportunity you need to achieve it.

I’m not saying you should live in poverty and scrimp on everything. Just don’t feel entitled to the best of everything just because you can afford it right now. If you do that and you want something you don’t have the money for in the future, you’ll have to cut back to save the money. Living slightly below your means will ensure that money is readily available so you won’t have to cut out things you want or need to get something else.

Too many times people try to do as the old saying goes, "keep up with the Joneses." For all you know, they could be paying for that expensive lifestyle they have with credit cards and extensive loans. They may be so far in debt that they’re actually broke.

Once you reach a certain lifestyle, it is much more difficult to lower it than it is to raise it. The hard work, goal reaching, and money saving lifestyle you’re living right now will be rewarded in the future!

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Financial Wisdom: Live Beneath Your Means