No matter your income, do you live within or beyond your means?
I recall my parents complaining that based on their combined income that the gov't would not help them pay for the college educations of myself and my siblings until they had given $17,000 / year. They were living too close (if not over) their means. They said that they could not afford even $2000 / year extra.
We live within our means. Years ago, we used credit cards like cash and while all of our credit cards and other bills were always paid on time, the credit card debt was substantial.
We got it all paid off and have never done that again. But when the kids still lived at home we did use them quite a bit.
My wife and I always lived within our means. The funny thing though is that no matter how much money I earned our expenses would expand like gas to fill the earning gains. We also use credit cards like a no interest loan because we would always pay it in full when due. During the real estate boom, our neighbors refinanced their home and cashed out equity, then bought themselves new cars. We, on the other hand, stuck to our fixed rate loan and survived the crash. Some of my friends traded up on their house and got themselves into an interest only loan for the first 5 years. When the bubble burst, they were all in financial peril. Being fiscally conservative has certainly kept me out of trouble.
Growing up, my parents always said they never had money. In college, I realized that to be true. They set their limits and would not go beyond that because they knew what they could handle. However, they really reached to their limit. I learned from this by always having extra. Since I'm in charge of the family finances, our budget always has room for extra fun and entertainment.
We live below our means. For a while, we were living above and we just couldn't keep up the lifestyle with a new job for me and a pay-cut for him. So we eliminated any luxuries- eating out, seeing movies, overpaying bills- and we've been able to save quite a bit of money. We are now working on getting rid of cable, which is a burden unto itself. Slowly but surely, we are cutting into our debt and we should be in a much better position in a few years than we have been.
I hate doing this, but here's a link to a Hub that I've recently written about ways to live more frugally. Times are tough and these are tips that I myself have learned along the way. I feel like it should be shared in the event that it can help someone.
http://jjackson786.hubpages.com/hub/Way … issing-Out
We live within our means. Every once in a while we treat ourselves to something really nice but even that has been well thought out ahead of time.
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