Cheap Cost Living: The Ultimate Tip of All Time

Here’s the dealio—first of all never use a word like “dealio” again…you have labeled yourself as “dork” as soon as you do. But anyway, if you really want to master cheap cost living, there’s one ultimate tip that I can give that’s actually deceptively simple, but yet in today’s world, hardly anyone is following it. Violating this tip is why nations are saddled with multi-trillion dollar debt (ahem—America—ahem). Not obeying this tip is why families are under severe financial pressure and strain, which most of the time causes them to lash out on each other. Ignoring this tip is why businesses fold quicker than a cheap umbrella. It’s simply this…

Spend less than you earn.

What? Didn’t catch that? I’m going to say it again:

Spend less than you earn.

There’s no better way to exercise cheap cost living than that. There’s no better way to lay a foundation for true financial stability than that. It’s really a simple concept, and anyone who has passed 3rd grade math should know it to be true, but violating this principle has become the norm in our society, to the point where people actually think that it’s “normal” to be up to their eyeballs in debt. I’m constantly amazed by that, and even in my own life for a time I was caught up in the snare of debt. I am proud to say that I have whole-heartedly changed my ways. There was a time in America (right before the Great Depression) where anyone who had debt was considered to be a person with whom things were not going well. Even mortgages were rare during that time; it was customary to pay houses off with maybe two or three large payments. It wasn’t a norm for people to carry debt as just a part of their everyday existence.

Fast forward about 80 years and now we have a situation where people just assume that you are going to be in debt, and they assume that you actually need to go into debt to buy cars, houses, and other big-ticket items. It’s to the point now where you’re almost seen as an anomaly if you don’t have debt. I’m not trying to slam debt, because when used properly and with great discipline, it’s an okay thing, but let’s get real…how many people are actually disciplined enough to use debt properly? Not many. Most of the people I know (myself included) have abused debt, and it has brought great strain and stress on their lives (again, myself included). And the basic premise behind debt is very simple…you’re trying to spend more than you earn.

So I encourage you to examine yourself and your financial habits. Spending less than you earn is actually just plain old common sense. Yet, when emotions are involved, our desires cloud our judgment and we become great salespeople to ourselves, so that we can buy our own idea of why we should have this or that thing, even if it means getting into more and more debt. We rationalize it and excuse it away by saying “as long as I make the minimum payments, I’m good to go.” Very rarely do we take the time to think about the fact that we’re probably going to pay for that item about four times over once we pay off the debt by making only the minimum payments. It just doesn’t make a whole lot of mathematical sense to spend more than you earn, although it’s wildly popular nowadays. Lemme tell you, MasterCard, Visa, Discover, and American Express thank you from the bottom of their hearts.

So again, take the time to ask yourself why you feel the need to spend more than you earn (if you’re doing so). Be bold enough to be honest with yourself about it. Resolve to discipline yourself so that you won’t fall into that trap of selling your soul to your creditors every month. Spend less than you earn…there’s really no better cheap living tip I can give you than that.