Would you like to know the secret to both financial freedom and also happiness? Would you like to know of the one single thing that will solve your financial worries and at the same time, bring joy into your world? You would? Well, get ready. In the next two seconds, I’ll reveal this magic potion.
Ready? This is it – live within your means.
Live within your means; this is the key to both happiness and financial freedom. I mean it. It’s neither a joke nor an attempt at dry humor. Live within your means. That is the first thing to do to achieve both happiness and freedom from financial problems.
Though it’s very basic and very simple, most people cannot do it. Instead, most people will do all they can to live beyond what they earn. Whatever they make, they spend all that and then more. This leads to a guaranteed catastrophic ending – financial disaster and misery.
But what does living within your means mean?
A few things. First, it means that whatever your income is, spend less than that every month; second is to buy only things that you can really afford, i.e., without overextending your financial resources; and finally, to accept that there are things you will have to do without.
If you can do all three, then you’re home free. You are wealthy because you’ll always have money. Further, you are free from debts and therefore escape the heavy burden of paying interests. Best of all, you are also a lot happier than those people who are up to their ears in debts. At the same time, you can still enjoy most, if not all, the materials goods that everyone else is enjoying.
Living within one’s means is not just necessary for financial freedom but also critical to happiness. If you make a million dollars a month but spend one point one million, you’re heading towards the same rocky road as those guys making one thousand and spending two. While you may be happy spending all that money now, it’ll come to an end, sooner than later. When the bills, legal letters and court proceedings start, you can say goodbye to happiness. Not exactly a place where the sun always shines. No happy faces here.
Dr. David G. Myers wrote about the relationship of wealth and happiness in his excellent book The Pursuit of Happiness. He revealed that studies conducted all over the world imply that there are two ways to be rich: “One is to have great wealth. The other is to have few wants.” Isn’t that great? You can live within your means, have few wants, and be both rich and happy.
If that still hasn’t converted you, let me quote another study. In their best selling book The Millionaire Next Door, Thomas J. Stanley and William D. Danko revealed seven common denominators about millionaires in the US. The first denominator? All the millionaires live well below their means. If you missed that, I’ll repeat it – all the millionaires live well below their means. See, they not only live within their means but actually live well below their income. Living below our means may sound alien to some of us, but perhaps that’s one reason why we are not while they are millionaires!
I’m not asking you to live well below your income, just to live within it. But if you can do the former, then do so by all means. For all you know, you could join those happy nine million American millionaires. And why not? After all, you are already doing the first thing required to be a millionaire.
Rich and happy – not a bad life, not a bad life at all.