Act Your Salary – Living Within Your Means
You’ve heard him say before that you must “live within your means.” Many people understand that this means living cheaply, clipping coupons, shopping at thrift and thrift stores, but those are all misconceptions. Living within your means doesn’t have to mean living “cheap.” It simply means that you maintain an affordable lifestyle for yourself.
A better way to put it is this: Act on your pay!
We’ve all seen it before and most of us have done it before. An important part of the population uses their possessions to define who they are. Expensive cars, expensive clothes, quirky electronics, and home entertainment items – none of these things define who you are, but many people act that way. This is a major factor contributing to the economic decline in America today.
The main problem with living like you make more money than you actually do is debt. Things like clothes, nights out, dinners, drinks, etc. they are bought with credit cards. Since most of us who live this way don’t keep track of our expenses, debt slowly accumulates until a few nights in the city add up to tens of thousands of dollars.
The accumulation of debt leads to higher monthly payments and longer payment terms. It doesn’t seem like a huge increase every month, but over time, your entire paycheck will go out the door the moment you walk in.
Change your attitude!
Living beyond your means comes from our materialistic nature and our need to gain the approval of others. Before you can truly transform your finances, you must accept that living up to other people’s standards is not the life you want for yourself. Your expensive clothes do not impress anyone. Your car that you can’t afford doesn’t impress anyone. Stop living for others, make smarter decisions, and put your long-term best interest first.
We would all like to live like a professional athlete or a pop star, but at some point you have to accept that you are not a millionaire and you have to come up with a plan. That’s not to say that becoming a millionaire, or even a billionaire, is out of the question, it’s just not the reality right now. Act your salary. When you make a million dollars, you can spend a million dollars.
I’ve never met a millionaire who said he got rich on credit cards and debt, and I doubt you will either.
Create a budget
Budgeting is the most important part of having a financial plan and living within your means. The budget tells your money BEFORE it arrives where it is going and how it will be used. Completing the budget makes prioritizing easier and ensures that things get paid for on time. Budgeting also keeps you from overspending and tracks any overspending at the end of the month.
Whichever way you decide to work, creating a budget is vital to financial success and living within your means.