It’s Better to Live Cheap Under Budget than Luxuriously in Debt

There are two ways to live life:

1. We can live in a way that we spend less than we make.

2. Or we can live in a way that spends more than we make.

I suppose you could argue there is a third way: Spend exactly the same amount as you make. And that may be true, but unexpected emergencies happen all the time. Spending exactly the same as you make only lasts until your next financial emergency—and then you’ll find yourself squarely in the second group.

It would seem, looking at the options, most people would choose the first. The stress of constantly living in debt, of constantly being held hostage to your past, of even living with a sense of fear or panic is a way of life that nobody desires.

Spending less than we make is the option people would rationally choose. But most of us don’t.

In fact, roughly 60% of us spend more than we make.

Here are the statistics:

60% of Americans could not pay for a $1,000 emergency expense.

77% of Americans report feeling anxious about their financial situation. 

And the numbers are only getting worse.

Why is that? Why is a life with less stress and worry so difficult for so many of us to attain?

Why do most people choose to outspend their income?

There are some who will argue that the system is rigged and it is simply impossible to make enough money to live within your means. Of course that may be the reality for some, but it’s certainly not the reason for most. And most importantly, it’s likely not the reason for your choices.

More likely, the reason so many choose to live a life outspending their income is because messaging and marketers are constantly telling us that we’re missing out by not spending more money.

Consider this: you can’t turn anywhere inside a civilized society (nature may be the only exception) without being bombarded with advertisements promising a better life than you’re living… if, and only if, you are willing to spend to get it.

We’re promised a better life by spending more with almost every turn of our head.

The promise is so ingrained in our subconscious, from the moment we are born, that we subtly and unintentionally fall into the trap.

An increasing income doesn’t quench the desire. Offers for a better life only grow with our income… nicer cars, bigger houses, fancier meals, more luxurious vacations… the temptation to overspend never, ever ends.

The promise of a better life always lies just outside our current income. So we chase it, endlessly—always spending just a bit more than we have.

But it is better to live cheap under budget than to live luxuriously in debt.

Living within your means results in a self-satisfaction that cannot be purchased at a department store.

It results in a restful calm at the end of the day that can never be experienced at the fanciest hotel.

It results in a genuine self-confidence that can never be purchased on a clothing rack.

It results in an ever-present enjoyment that can not be duplicated with a fancy vacation.

It results in an example for your family that can never be purchased with self-help courses.

And it results in a life well-lived with fewer regrets.

The world will tell you spending more is the key to a better life.

But I can attest, it is better to live cheap under budget, than it is to live luxuriously in debt.