When we purchased our first house we put down a large down payment. Our realtor was surprised to find out we didn’t have any other debt. Getting the loan was no problem as we bought quite a bit less house than what the banks said we could afford. This all seemed normal for us–we try to live within our means if not a little below it.
Several years later the realtor stopped by to say hi. He said, “You and your wife were really an inspiration to me. We’ve started paying off our debt and trying to get our living expenses under control.” Evidently his normal customers weren’t people who lived beneath their means.
When you spend less than you make, you are buying flexibility and freedom. You gain the ability to change jobs or move to another area of the country. You are buying the ability to say yes to the things that matter because you save on the areas that aren’t as important to you.
This isn’t something most people do. If all your friends spend every penny they make it is easy to feel like you are doing well by just not going broke. There are people who are quite wealthy even if you’d never know it. They have chosen financial freedom over financial exhibitionism.
Unfortunately it is easy to notice the people living beyond their means and harder to spot the people who are living within it. This means we tend to see reckless spending as normal simply because it is so noticeable.
Do you have any examples you’d care to share of people living beyond their limit financially?
Good management of your finances can have one of the biggest impacts on your productivity because it determines how efficient you convert your time into money into the things you need.