Are you living above or below your means?

The sweet smell of payday. You just got your hard-earned salary and now, you are so ready to spend. While you are about to take that first step towards nearest mall, you suddenly stop and give the cash in your hands a second look. Then you think and ask yourself, can I afford buying that much-craved for dress? If I eat dinner at this newly opened restaurant, would I still be able to manage my finances until the next payday? Consider this question: are you living above or below your means?

When a person is living beyond their means, that basically implies that he or she is spending more than he or she is getting.In contrast, a person living below their means do spend, but in the most frugal and smartest way. Given these two scenarios, the latter obviously tends to save more money at the end of the day. Living below your means is, regarded by most people, as the most practical and intelligent practice to save money. However, you must also consider the fact that people do tend to live beyond their means as a result of fulfilling the ‘earthly’ desires that they previously craved for. You dream of that expensive car that could motivate and inspire you, so to attain those positive feelings, you stretch out all of your credit cards and bank books to get that car. At the end of the day, you do have a brand-new, expensive car parked at your driveway, but tons of debts that you need to worry about. On the other hand, living below your means can also employ the “play safe” approach to spending. Instead of buying that dream car, you settle for the second-hand beat-up cadillac that would serve the same purpose for transportation but would save you hundreds of dollars. More money goes to your savings, but the feeling of motivation and inspiration is absent.

So would you rather live above or below your means?

Balancing the two opposing ideas and infusing them into your lifestyle is the key.You, yourself, know what type of lifestyle you have. Budget the means that you currently get, but do not extinguish the extravagant material things that you long for. Spend wisely. Strictly follow your monthly budget, and at the end of the month, the budget surplus that you had incurred may be allocated to those “way above your means” possessions. Remember that you do not need to impress other people. Avoid indulging on things that are bought just so you have something to brag and show to others- attitudes that somehow suggest to others that you are far more successful and richer than they are. With good plans of what you want to purchase given the budget surplus calculated, you have an option to acquire the things that would motivate and inspire you to keep working hard. At the end of the day, with all your needs met, all bills paid, and some spare money tucked in your savings book, you can still continue planning for bigger splurges in the future. When all conditions are met and you are not left with a heavy financial cross to carry,then you can rationalize that it was a smart move.

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