The Simplicity of Living Beneath Your Means


simple lifeComplicated strategies and theories fill the personal finance blogosphere, but you can put them all together and none of them have the effectiveness of one very simple concept: living beneath your means.

An oversimplification? Read on.

More money for savings

If you’re always living beneath your means, even if it’s only by a little, you will always have money for savings. Even if you only bank 5% or 10% of your net paycheck every month, your savings are perpetually on the rise. The longer you’re able to do that, the closer you will come to true financial independence.

Because you condition your self to live beneath your means, you’re in a savings pattern that will stack the financial deck in your favor no matter what else is happening.

Less debt

One financial issue that plagues millions and millions of households is debt. But if you’re living beneath your means debt has a way of either going away on its own or never happening in the first place.

Debt is usually a symptom of the exact opposite of living beneath your means. If you live above your means, even if it’s only a little above, you will end up in debt. And your debt will grow for as long as you’re living above your means. It’s simple, if you’re spending more than you earn you will have to make it up somehow. That is usually with debt.

If you are living beneath your means, that isn’t a problem you will ever have for very long.

Survive at nearly any income level

When you’re into the discipline of living beneath your means, you can generally survive at nearly any income level. Losing a job and being forced to take another that pays 10 to 20% less than what you’re making isn’t a major problem. You simply lower your living expenses by 10 to 20% and you’re back in business. You’re survival is never in doubt.

Ability to quit a job

There’s an unmistakable freedom that comes with that lifestyle. If you are living beneath your means, you can afford to lose a job or to quit one without fear that you’ll be plunged into poverty. You always have extra in your budget and you know that you can survive because of it.

When you live beneath your means, you develop employment independence. You’re never completely dependent on any given job, or pay level. Since your dominant financial philosophy is living beneath your means, you can adjust to live on any income level and not only survive but also thrive.

That situation heightens the chance that you will be able to pursue nearly any job, career, or business that you choose. Since income paralysis will not be a problem in your life, you can do the kind of work you want, that you love. Of course, another big advantage here is that if you are doing work that you want to do and like to do, chances are excellent that you will earn more money doing it.

It’s another one of side benefits of living beneath your means.

Living with less worry

Everyone has worries in life, but when you are living at or above your means you can have a lot more worries. Every month is a struggle to make your budget, or else to go deeper into debt. Either scenario comes with its own set of problems. This can cause you to lose sleep, to under-perform at work, to be inattentive to family and friends, and even to degrade your health.

When you live beneath your means, most of those worries will go away. This will give you more stress-free time to be more productive in your work, to build better relationships, to take care of yourself and have more fun in life all around.

All of these advantages come about because of one simple philosophy: living beneath your means.

Have you ever thought about how this single, simple strategy can change everything about your finances?

photo by pagedooley

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Written by Kevin

With backgrounds in both accounting and the mortgage industry, Kevin Mercadante is professional personal finance blogger, and the owner of OutOfYourRut.com, a website about careers, business ideas, money and more. A committed Christian, he lives in Atlanta with his wife and two teenage kids.

Kevin

With backgrounds in both accounting and the mortgage industry, Kevin Mercadante is professional personal finance blogger, and the owner of OutOfYourRut.com, a website about careers, business ideas, money and more. A committed Christian, he lives in Atlanta with his wife and two teenage kids.

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