The Art of Living Within Your Means

by | Nov 12, 2015 | Finance | 0 comments

Live within your meansWhen I was 18 years old, around the time I got my first job, my Nana, who lived like a queen on her meagre government pension, sat me down for a financial chat.

I loved my Nana but I was also a teenager, so while I listened to what she had to say, I didn’t really take it on-board. (After all, I knew better.)

Now, some 30 years later, I find myself wondering how differently my life would have turned out if only I’d taken her advice instead of blowing it off it as old people waffle.

Life is too short for what ifs and should haves, I get that, but I’m not going to lie, it smarts a little knowing I could have been retired by now. So what was Nana’s advice?

Live Within Your Means

Nana’s approach was simplistic to a fault. “Divide your salary into three,” she told me, “save a third, spend a third and use a third for your living expenses.”

“Okay Nana,” I replied and promptly spent the next two decades racking up as much debt as possible.

I get that my Nana’s approach to finances has some caveats. In her day the cost of living was a lot less than it is now, which made it easier to follow her advice. Nowadays it’s much tougher to make ends meet. If you’re in the low-income bracket chances are your living expenses alone will exceed your monthly earnings.

I can’t begin to imagine what that must be like, nor do I have any wisdom to share on the subject. My advice is aimed at us middle of the road earners, because that’s what I know. And let me assure you, we can absolutely live within our means. The only thing stopping us is that it won’t be as comfortable as we’re used to (or would like it to be).

Convenience and Instant Gratification

We’ve grown accustomed to the two cars, the spacious house, DSTV, uncapped Internet, Netflix, eating out, buying new clothes on a whim and going to the movies as often as we like.

We want convenience and instant gratification and we want it all now. But just like the kids in the marshmallow test who missed out on a second treat because they couldn’t wait 15 minutes, our impatience and childish demands are costing us too. Unfortunately it’s in an area that cannot be replenished. Time.

Every time we give in to our desires we’re adding another layer to the tape that’s keeping us from living the life of our dreams. So long as we’re in debt, living month to month, pay cheque to pay cheque, we’ll be bound to a job we don’t enjoy, because we can’t survive without the salary.

It’s a never ending and depressingly vicious circle, because to make ourselves feel better about spending eight (maybe longer) hours a day at a job we don’t enjoy, we spend money we don’t have on stuff we could do without but don’t want to because it offers a short-term fix to a long-term problem.

Long looonnng sentence I know, but you see where I’m going with this, right?

When You Think You Know But Really Don’t

Sporty and I might have paid off all our debt, downsized our stuff and honed the art of saving, but upon closer inspection (read: when we finally took our heads out of the sand) we realised that all along we’ve been living according to her means.

Being the more career-driven between us, Sporty has always earned the big bucks, whereas my financial contribution has remained steadfast in the small to medium range. Sporty enjoys her job, but not to the extent that she wants to do it forever. At some point she’d love the opportunity to move to a plot and open an animal sanctuary like this one or this oneHippie much?

But because we’re essentially living beyond our means, that’s not an option for her right now. And probably won’t be for some years to come. Now if we scaled back to a budget based on my salary (times two) we’d be able to save way more money every month.

An Experiment Gone Wrong

Whatever it takes for you to find your freedom, that’s what you’ve lived. —Byron Katie, Loving What Is: Four Questions That Can Change Your Life

At the beginning of the year Sporty and I got it into our heads to move into a really expensive apartment. We reasoned that since we stay home a lot we could justify the hefty price tag. We also argued that its ridiculously convenient proximity to gym, work and the mall made it more than worth it.

Plus, we reckoned we deserved it. So why the hell not, right?

As if that wasn’t enough we then went ahead and broke our one cardinal rule when it comes to renting an apartment: never sign a lease for longer than six months. Yip, we happily tied ourselves into a year long contract without so much as a second thought.

You’re Never too Old or Clever to Learn

We’d clearly gotten so comfortably cocky with our debt-free “sobriety” that we considered ourselves above making financial faux pas (as in paahs, plural) and as such didn’t think through the details of what would turn out to be a very clumsy decision. Had we bothered to take the time, we’d have quickly seen it for the harebrained idea it was.

Still, as Byron Katie also says, “If it was meant to happen, it would have.” I can only hope the reverse is also true.

With this in mind Sporty and I are taking the time to carefully consider all our options before our next move at the end of January. Right now the plan is to go completely in the opposite direction and find a small, super affordable place to hang our hats. This means taking spoonful of our own advice and doing away with many of the creature comforts we currently enjoy.

The Freedom to Choose

At the beginning of the month I resigned from my job. There were a few reasons that led to this decision. My position held no scope for growth, two years in government is about as long as any sane person can take without derailing completely (I was there 19 months, I wasn’t taking any chances), I got a “too good to refuse offer” with a like-minded company working, wait for it, three days a week.

Now if we hadn’t been so diligent about our finances up until now I’d never have been able to even consider this opportunity. (It helps that our lease is almost up, but even that wouldn’t have been a deal-breaker.)

But that still leaves Sporty in a well-paying job she thankfully enjoys enough that she doesn’t resent it. Although even if she didn’t, she wouldn’t, ‘cos that’s just not how she rolls. Zen much?

Which brings me back to our future student/monk digs. The plan is to scale back completely and live so well within our means that my Nana will be beaming with pride from whatever heavenly perch she’s currently occupying.

Now What?

The lesson is a simple one. Make small sacrifices today and enjoy big rewards in the not too distant future. Whether your dream is to sail around the world, open an animal sanctuary or thru-hike the Appalachian Trail, living within your means is one of the fastest ways to get you there.

With the Holidays upon us, I’d urge you to really think about this. Take it on-board and you’ll get through Christmas debt-free, or at least without incurring more debt. Yes, it’s fun shopping for gifts and getting them can be a real treat too, but it’s still just stuff. Memories come from being and doing, not having.

This one’s for you Nana, thanks for the great advice! 😉



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