Wednesday, January 28, 2009

Living On What You Make

I read this post at that I thought I would share. How often do we think that making more money would be the answer to all our financial problems?

But if you can't manage your money when you make $40,000 a year, you won't be able to at $400,000 a year. The principles are the same.

This is my favorite part of the post: "Luxuries get sampled and become necessities. And while the pleasures you get from the finer things in life are nice, the pain that you experience if you ever have to give them up becomes huge. It wasn't any one thing, it was a train of connected "upgrades" to our lifestyle. And if you let the upgrade train get away from you, you all of the sudden realize that you're struggling to pay for the ticket."

How true is that? Here is the beginning of the post and there is a link to the rest at the end. Enjoy.

"I didn't always make a lot of money. Nor did I come from a wealthy family. Nope, I started on the bottom rung, worked hard, waited patiently, and finally one day, I woke up, and all of the sudden realized I was finally making some decenet money. Not big shot, second-home, his-and-her-7-series driving money, but better than most of the population, and certainly better than any of my friends or family. Combine that with being married to a fellow college grad with her own professional job, and between the two of us, we pull in around $200k per year. And we're living paycheck to paycheck. Although this is an alternate name I created to hide the personal details from my usual login, I've been a regular FWF contributor for as long as I can remember. I've posted quite a bit here (I'm not one of the "biggies", but I have a good number of posts to my name, all with their fair share of green). I know all the conventional wisdom. I follow the Boglehead philosophy, know about how to allocate money, know all about the wonders of compound interest, and have read all the books. Tobias' Only Financial Guide You'll Ever Need? Check. Random Walk, check. Millionare Next Door, Your Money or Your Life, and even (sigh) Rich Dad Poor Dad, check check and check. How I got to where I am was both sobering and humbling, and I figured I'd tell the story just in case it might help anyone else. No sob story about medical expenses, divorce, or some scam business opportunity. Nope, my wife and I just let ourselves spend too much. No one to blame but us..."

The rest of this post and responses can be read here.


Angie said...

This was a good one. So very true.

Shopgirl said...

We have never had alot of money, but we seemed to have all we need. Now remember I said, all we need, not all we want. I think this is a time to look around and see what we are really about, what can we do for others, these are hard times for so many. We have more than what we need, and I will probably always want more, but I am making a effort to remember what I already knew...don't spend what you don't have. Give if you can, I found out this Christmas that Less is more!!!!!! Love your post, we need to think more and spend less. Your, Mary