I recently spoke about how one of the keys to budgeting and saving is the ideology of spending less than you make.

The reason I am bringing it up again is because too many people have only realized that this is important until it is too late. In many cases people have lost much of what they have worked for because they gain a huge amount of debt that they have to pay, however what they earn cannot support the payments necessary to lower their debt.

I explained the easiest way to figuring out whether you are spending more than you make, which is simply looking at your credit card bill and determining what the majority of your purchases are. If you do find that the majority of your purchases are more of a luxury than a necessity, and you are carrying a large balance, then you are more than likely fit in the category of those who spend more than they make.

Now we will get into the information that could help you start spending less than you make.

Once you admit what you are doing, all it takes is creating a budget that works with your lifestyle and how much you earn. You cannot put a complete stop on your spending habits. It will take some time to get to a level where you can enjoy the best of both worlds, saving money, while enjoying a bit of luxury.

Until then, you have to make constant adjustments to your budget until you reach the perfect balance.

My recommendation is that you adjust your budget every 2 – 3 months, which gives you ample time to get adjusted to it, and get into the habit of spending less. When changing your budget, slowly take out items that are not necessary for you to have every month, and change it to something you can do every couple months.

It will take time, however once you settle with the right budget, you will find yourself having just as much fun as you used to have when you spent out of control, but you can save for future goals at the same time.

One of the keys to success when it comes to budgeting and saving is the ideology of “Spending less than you make”.

There are far too many people in the world who extend themselves too thin by spending much more than they actually make. By living this way, people can find themselves in a hole of debt faster than they ever thought possible, and the path to getting out of that debt is extremely difficult.

The person would have to not only start budgeting, but also their lifestyle will need to change completely.

When you begin to create a budget you will have to go through a list of your expenses, and you may come to realize that your spending has gone out of control.

An easy way to tell that you have bee living out of your means is to simply have a look at your credit card bill. If you notice that you carry a huge balance, and the majority of purchases are more of a luxury than a necessity, then you are definitely spending more than you make.

It will take time to get into the habit of spending less than you make, especially if you want to save some money for any goals you may have. However, the moment you get into the habit of doing so, it can become second nature to you.

Before it is too late, sit down and examine your lifestyle.

Do you spend more than you earn? Fix the problem before you find yourself in a huge pile of debt.

This post is the fourth in a series on “spend less than you make”. See also the articles on spending, less, and you.

“Spend less than you make.” Such a simple yet complex phrase. But what does it really mean? This series of posts will take an in-depth look at just what it means to spend less than you make.

What is to spend less than you make? For some, it is the core of their essence, what drives them when they wake up, what they think about when they go to bed. It is what stops them in the store, and what keeps them going to work. For others, it is a catch-phrase, a cliche, a cop-out. It is a mere formality, an obvious understatement, a meaningless phrase.

At face value, the phrase is self explanatory. Spend (as in purchase) less (as in, not more) than you make (your income). What more could be said?

Making is Necessary

In order to spend less than you make, you have to make something. It is impossible to spend less than nothing. It is quite possible to spend nothing. I spent the majority of the first three years of my life spending nothing. However, I was also not making anything either, meaning that I wasn’t spending less than I was making, I was spending the entirity of what I was making. I just happened to be making nothing.

In order to live in this world, you’re going to have to make money. There is no set amount of money that you have to make, and there are tons of different ways of going about making that money – but you do have to make something.

How you go about doing that is up to you. You can make money doing customer service, or manual labour, or on your uncle’s farm. You can make money selling things, buying things, or salvaging things. You can find money where no one else has dared to look, you can acquire money through nefarious means, you can earn money investing your money, or other people’s money. Some choose how they make their money, for some, the choice is made for them. Some have plenty of options, some don’t have any options. It doesn’t really matter how you go about making money, you just need to make it.

The best thing you can do is to figure out a way to enjoy making money. Making money is necessary, but it shouldn’t destroy your life.

Making is Natural

Humans were made to work. Its part of our structure, our genes, who we were made to be. Its why at the end of a long hard day, you relax. Its why it feels good to go to bed a little sore. Its why we push ourselves, strain against restraints, and try to be the best in our field. Its why being bed ridden destroys us, why a desk job feels so unnatural, why the sunshine wakes us up in the morning. We were made to work, its part of our natural rhythm.

Our entire society, our culture, our lifestyles, revolve around making money. Those that refuse to make money are the odd ones out – and even they often try to find or use or make money on the side, to support their non-money-making life. When you wake up in the morning, you go somewhere you can make money. When you come home from making money, you find ways to save money, so you don’t have to spend even more time making more money. The majority of light night television exists as a way to make someone else some money, while removing you from yours. The majority of interactions we have with other people – especially strangers, revolves around one person making money and another person spending it. The majority of our life is spent making money, worrying about making money, and spending the money that we made.

It may not be ideal, but it has become normal, natural, and virtually inescapable.

Making isn’t Everything

Making money may be necessary, and it may dominate our lives, but it isn’t everything. There is no point in making money just to have money. As I mentioned before, money is made to spent, not hoarded. Find out how much money you need, find out how much money is enough, and make that much – then stop. Don’t find extra work, extra jobs, side work, side jobs. Don’t scrimp and scrounge and save, unless you need to.

Your life is not your work. Your life is your relationships, you goals, your dreams, your children. Your life is not the size of your bank account or your investment portfolio. Do not become obsessed with making money. You will never have enough.

There are a lot of people that have lost their jobs recently. While that is heartbreaking, despairing, and difficult, it is not the end of the world. There are other ways to make money. You are not your job, your paycheck, or a subject of your employer’s kingdom. You are yourself, and your job does not define who you are. For some, their job is an extension of who they are. Instead of the work confining and crushing the person into a misshapen wench, their job flows as naturally from them as does their speech. There is a difference, and it is an important one.

Don’t get caught up by jobs, and roles, and salaries. Don’t do work that you wouldn’t feel comfortable doing for free, work that might be unethical or inhumane. Don’t do work where the money isn’t worth it. Find something else. You aren’t as trapped as you think you are.

Don’t chase a paycheck to live a life you don’t enjoy anyways. If you need to hold a certain job to maintain a certain lifestyle, change your lifestyle. Being a hermit can be remarkably enjoyable. Taking the bus is transportation and entertainment. Renting is not for those of a lower class.

Making money may be necessary, but it isn’t everything. Stop pretending it is.

If you’ve enjoyed this series, consider subscribing to Saving For Serenity.

This post is the third of a series on “spend less than you make”. See also the articles on spending, less, and make.

“Spend less than you make.” Such a simple yet complex phrase. But what does it really mean? This series of posts will take an in-depth look at just what it means to spend less than you make.

What is to spend less than you make? For some, it is the core of their essence, what drives them when they wake up, what they think about when they go to bed. It is what stops them in the store, and what keeps them going to work. For others, it is a catch-phrase, a cliche, a cop-out. It is a mere formality, an obvious understatement, a meaningless phrase.

At face value, the phrase is self explanatory. Spend (as in purchase) less (as in, not more) than you make (your income). What more could be said?

You are Necessary

In order to spend less than you make, you need to be involved. You need to take action. You need to embrace less.

If you’re reading personal finance blogs, then chances are good that you’re headed in the right direction. You’ve started informing yourself, the first step towards getting your finances in order. You need to embrace knowledge, banish ignorance, accept that you need to start to learn about your personal finances.

Personal finances are just that – personal. This isn’t something that your mother can take care of for you. It isn’t something that your grandfather can just bail you out of (again). Personal finances are not the responsibility of your husband, your wife, or your accountant. Your bank does not care about you or your financial situation. Your investment broker doesn’t care about the best options for you. Your friends are not keeping your best interests in mind.

Only you know what is best for you, what your dreams and goals and desires are. Only you are able to change your lifestyle to match your financial needs. Only you can say no to wasting, yes to budgeting, and wait to spending.

Only you.

You are Responsible

What does your financial situation look like right now? Regardless of what it looks like, or how you got there, you are responsible for the state it is in today. It doesn’t matter if it was your business partner’s fault, a crazy ex-girlfriend, or just plain bad luck. Its still your responsibility. In fact, if you walk around blaming others for your financial situation, you’re shooting yourself in the foot. Why? Because those people aren’t going to come back and fix your situation for you. It may not be your fault, but it is your responsibility, so you’re going to have to fix it.

You are going to have to figure out where you stand. You are going to have to track where you’ve spent your money. You are going to have to think about where you want to be in 5 years, what you want to save for, what’s worth your time. And then you are going to have to take action on those things, because nobody else is going to do it for you.

You are Alone

You are, and are not, alone. You are not alone because you have a spouse, family, or friends that you can share your financial struggles with. Your finances are intrinsically tied to your bank, your accountant, your lenders. You are alone because your financial situation is unique.

Nobody else has the same income, expenses, dreams, goals, and desires that you do. Nobody else lives in the same house, drives the same car, eats the same food as you do. Nobody’s needs are identical to yours. This means two things. One, don’t judge others based on their needs and wants. Two, don’t get caught copying someone else’s lifestyle.

Who cares if your neighbor has a better car than you do? Why does it bother you what someone else thinks about your favorite restaurant? So what if you can’t afford the newest PS3 game, a new shirt, or a night on the town? Everyone’s situation is different. Some people don’t care if they’re in debt – you might. Some people might not be bothered by making their own laundry detergent – you might. Some might feel the need to spend more on housing, or clothing, or gifts, than you do. That’s okay. You don’t need to match them and their lifestyle if you don’t want to, or can’t afford it.

What Does This Mean?

• Stop Waiting

If you’ve been hesitant to take control of your finances beacuse you’re waiting for something – stop waiting. You aren’t going to win the lottery, your raise will not fix the problem, the bad luck won’t end. The time to take control of your finances are now – stop putting it off, and stop waiting for something else to save you. Its your money, its your life, its your time. Take control now.

• Stop Feeling Sorry For Yourself

Yes, your situation sucks, and yes, you’re situation is unique – just like everyone else’s. You may feel as though you deserve pity, or help, or a bailout. You won’t be getting that from me. Yes, some of us have to work harder than others to get financially secure. Some people have never had to work hard, and never will. Some of us are going to struggle each and every day, fighting just to keep our heads above the water. The best thing you can do is stop feeling sorry for yourself, find out where you’re at, and how you’re going to get out of the mess you’re in. Feeling sorry for yourself will only delay and extend the pain you’re in.

• Learn Everything You Can

The only way you’re going to feel comfortable and confident in your finances is if you know what you’re doing. Luckily, you’ve stumbled across one of many fantastic personal finance blogs that are custom made to help you out. Go ahead and subscribe to get free updates to Saving For Serenity, so I can help you establish financial freedom.

This post is the second of a series on “spend less than you make”. See also the articles on spending, you, and make.

“Spend less than you make.” Such a simple yet complex phrase. But what does it really mean? This series of posts will take an in-depth look at just what it means to spend less than you make.

What is to spend less than you make? For some, it is the core of their essence, what drives them when they wake up, what they think about when they go to bed. It is what stops them in the store, and what keeps them going to work. For others, it is a catch-phrase, a cliche, a cop-out. It is a mere formality, an obvious understatement, a meaningless phrase.

At face value, the phrase is self explanatory. Spend (as in purchase) less (as in, not more) than you make (your income). What more could be said?

Less is Necessary

Spending less than you make is necessary. Well, technically speaking, in the short term, its not. It depends on the length of time that you’re considering. If you have a bunch of money in the bank, you can easily spend more in a week than you’ve earned working your job. Or, if you’ve ever gone on vacation, you’ve been spending more than you’ve been making, because you’re not making any money! I would say that everybody, at some point in their life, has spent more than they’ve made. Over a short period of time, its definitely possible.

In fact, it becomes even more possible when you consider just how many people are willing to let you spend more than you’re making over the short term. They’re quite willing to lend you some of their money so that you can purchase whatever you feel you need to. They just politely remind you that you need to give it back – eventually, and with a little bit on top for their troubles. There are a million ways to spend more than you make – but only for now.

The problem is, one day, you’re going to have to pay it back. One day, you’re going to have to bring the total in the expenditures column in line with your income column. One day, you’re going to have to pay for the things you purchased.

That’s why spending less than you make is necessary. Anything else is unsustainable.

You can do it for awhile, and there’s all sorts of tricks to keep it up; like paying off debt with more debt, pushing balances around on paper, but the simple truth is that it won’t last forever. One day you’re going to be held accountable for the money that you spent, one way or another. You can keep running and hiding, if you’d like. A lot of people do. Or, you can stop spending more, start spending less, and pay as little interest as possible.

Less is More

However are you going to manage to survive spending less? Don’t you need to keep purchasing and buying and consuming? In fact, don’t you need even more money so you can buy even more things?

No. You don’t.

Actually, a lot of people of learning to live on less. Not only is it manageable, it is often preferable. The ethic, the ethos, the mantra of less means that there are less things to get in the way of what you really want. Instead of becoming a slave to the closets and storage rooms of crappy goods and disposable purchases, sell what you don’t need or use on a daily basis, and find peace in the empty space. Stop being afraid of silence and downtime. Start embracing sustainability.

Spending less is easy as soon as you change your mindset. More things, more purchases, more expenses will not save you, they will trap you. Realize that less is more.

Less clutter means more room, more space, more freedom. Less clutter means less time cleaning, and sorting, and organizing, and picking up, and repairing, and replacing. Less clutter means more time for family, friends, a good book, a vacation, for relaxing.

Less spending means more saving. Less spending means more emergency funds, more discretionary money, more for planned spending. Less spending means less debt, less interest, less payments.

Less work means more time at home, at play, in the park, on the mountain, by the ocean, in the sun, on the deck, in the hamock, with your kids. Less work means less stress, less commute, less responsibility.

Less Isn’t Difficult

Less is an incredibly simple math problem.

[Income] – [Expenses] = More or Less

You either get a positive number, meaning you spent less than you made, or you get a negative number, meaning you spent more than you made.

Spending less requires just two things, then:

• Knowing how much you made [Income]

Do you know how much you make? A lot of us think we know how much we make, but the math is always a little fuzzy. Is your paycheck the same every two weeks, or does it change? Are your withheld taxes different this year from last? Was your raise as much as you thought it was? Did taking a day off affect your paycheck? Have you been keeping track of your paycheck? Have you read over your paystubs to ensure they are accurate? Do you know what your networth is?

• Knowing how much you spent [Expenses]

Do you keep track of your expenses? Do you use an online aggregator, like Mint or Rudder [my review]? Do you use a spreadsheet, to track your spending? Do you save receipts, do you live on a cash budget, do you write down your expenses on daily, weekly, or monthly basis? Do you include birthday money or gift cards? Do you know what your fixed expenses are, and how you can reduce them?

How do YOU find less in a world of more?