The Perils of Living Above One’s Means
Posted: Wednesday, April 02, 2008
by Terry Mitchell
http://commenterry.blogs.com
I recently read a story on CNN's website about a woman who had a job making a $70,000 a year, got laid off in February, and was having to go to the food bank in March. But where was her savings? She didn't have any because, like many other Americans, she was living way above her means and therefore was unable put anything away for a rainy day. Like many others, she just assumed she would always have a job and never planned for the possibility of not having one. While she was working, she made the mistake of thinking that things would always be as they were and the skies in her world would always be blue. No consideration was ever given to the prospect of a coming storm.
People are so covetous for expensive houses, cars, and other things these days that they don't bother to think. (There's more than one reason why covetousness is one of the seven deadly sins). I make more than $70,000 a year, yet I have limited myself to a mortgage payment of less than $700 a month. Therefore, I have no trouble making that payment and have plenty of money left to put in the bank each month. That's called living below one's means and more people ought to have enough common sense to do it. In fact, I have been able to save so much that, if I were to be laid off, I could live comfortably off my savings for more than 5 years and would have no trouble making my mortgage payment during that time.
Now some may say that I'm cheating myself out of the more comfortable and luxurious lifestyle that I could afford if I wanted to. However, I believe peace of mind is worth more than that. To me, it's worth accepting a little less out of a home in order to build a hedge against hard times ahead. I don't want to have to struggle like everyone else when an economic downturn comes. Now, while everyone seems to be panicking, I can just sit back and take it easy. Some people, though, seem to always have to learn things the hard way.
This Article has been viewed 1,981 times. (Not updated in real-time.)
Top-level comments on this article: (6 total)He Terry, great article. I am going to pass it on. Thanks for sharing and for practicing what you preach. :-) Like I mentioned on another article. where were you when I was 18? We have lived and learned and have paid the consequences, thank God for grace and second chances. I hope many will heed this advice and not learn the hard way. Lord Bless you! Teresa
Great article Terry. The woman will learn much more about herself now than she ever did in her expensive home. Best..........e
Hello, Terry. You've written another good article. I learned from my mother never to count on what isn't in your hand already---she didn't teach it to me, I learned by watching her make the same mistakes over and over. I loved my mother more than life itself, but she had no sense of money management. If she saw something she wanted, she bought it, knowing full well she could not pay for it. Good informative article. Keep up the good work. SEG
oh, i do believe this to be true, but i think it is more the fault of the lenders than the borrowers. They convince you that this is within your salary range to obtain, and naive buyers who already have inferiority complexes are their prime targets. And yet, it still is not in the best interest of the bank to do so. Consumer spending is heavily influenced by available credit. i've been offered so many credit cards, since I was in College! They want you to miss a payment, because with all of the fees and increased interest rates they charge, is where they make the most of their money. it is evil, just plain evil!
and consumer debt is only going to get worse, as bankruptcy is becoming increasingly difficult to file.Jennifer, I agree that the way many banks, mortgage companies, and pay-day loan outfits operate is just plain evil. They have no conscience. They have no problem taking advantage of naive people. They will have to answer to God some day. However, it's up to educate themselves about such matters and be prepared to defend themselves. Yes, bankruptcy is more difficult to file now and I believe it should be even more difficult. I have a problem with people who don't pay their bills being let off from them scot free while those of us who dilligently pay ours on time get no break at all.
This is really helpful i think to my own view, When you are still at the lower cadre,you tend to postpone some of your responsibilities waiting for when u get higher pay but i think there is a step to make evn at that. So can i live within my earnings?
We want your comments! If you can read this, you don't have javascript enabled, so you can't use this comment system. Please enable javascript.