Ideas

Lesson #1: Live Within Your Means

Why it’s useful

The beauty of saving first is that you’ve thought through your long term goals and dreams and know what you MUST save to make them happen.

Josh Becker writes at becomingminimalist.com about The Joy of Living Within Your Means.

I’ve never heard it expressed in terms of “Joy.” But, as a 20 year veteran of the financial advice business, I can say that this is THE Personal Finance Difference Maker…

Do you save what’s left after spending -or- spend what’s left after saving?

Whichever way you go, there will always be an internal pull and sometimes be an external push to spend more.

If you save what’s left… then as you are pulled/pushed to spend more today you are pulled/pushed off of your long term goals and dreams.

The beauty of saving first is that you’ve thought through your long term goals and dreams and know what you MUST save to make them happen. By saving first and spending what’s left you protect those long term goals from the inevitable pulling and pushing that happens today (or tomorrow… or the next day).

This is how you get ahead.