When I first began my personal crusade to get a handle on my personal financial management I was faced with debt, a fixed income stream, and the great American approach of not living within my means.
In retrospect, I made many mistakes. Along the way I have learned much. One of the key principles is: You must spend less than you earn.
While on the surface this sounds simplistic the reality is for many that this simple concept is very difficult to apply in real life.
According to the Bureau of Economic Analysis (BEA), until this year the personal savings rate had hovered from below 0 to only 1% for years. If spending less than you make is so simple, why did so few do it?
Many of us, myself included, were living under the belief that we could afford what we could borrow. Housing prices were rising, unemployment was low and so was our guard. Many of us let our expenses get out of hand related to our income.
Due to a career change (resulting in a lower and fixed income) and the birth of a second child, I finally realized that we must do something different unless we wanted to continue the paycheck to paycheck lifestyle.
Our recession starting in 2007 woke up many others. According to BEA national savings rate is 4.25% as of the first quarter 2009. But this is an average, some are saving more some are saving less. If you are on the lower end of this scale, I am writing for you today.
The best advice I can share from personal experience on how to spend less than you earn is: Persistent purpose!
What are your goals? Getting out of debt, avoiding the paycheck to paycheck lifecycle or ultimate financial freedom; regardless of your goal you must focus even obsess on achieving your desired result. You must have Persistent Purpose!
Set your goals and don’t give up. If you want to spend less than you earn, I hope to provide many ideas on how to accomplish this. Subscribe to the RSS feed at the top of the screen and learn as we explore the opportunities we all have.
Remember: Persistent Purpose! Don’t give up.
Click here for Principle#1.
Click here to learn why it is easier to save a dollar than to make a dollar.