Half-Price State of Mind
The data is in and it’s not pretty: The average overspending American spends $1.22 for each $1 of income. If you’re “average” you’re in trouble. You are digging yourself into a horrible pit of debt.
Let’s say you’re below the average and spend $1 for every $1 you earn. That’s a lot better. Still, you’re living from paycheck to paycheck. If one thing goes wrong, you’ll be in trouble.
The key to achieving financial freedom is to live below your means — you limit your spending to $.80 for each $1 you earn. That leaves $.10 to give away and $.10 to save for the future. That’s called balance and I promise if you live by that formula you will never be broke. Impossible? No. It takes skill, effort and determination. It takes desire and commitment to live below your means without giving up your style and your quality of life.
The first step is to adopt a new attitude, a simple personal standard: I do not pay full price for anything. It is not realistic to think you will never pay full price for anything or that everything is available somewhere for just pennies on the dollar. But if your goal is half-price, it will average out over time. This is a mindset, an attitude.
Don’t worry that you’re going to lose your dignity and be plunged into a life of poverty if you live below your means. In fact, no one needs to know unless you print “I’m Cheap!” on your forehead. Instead, write this in your mind: Wherever I am, whatever I do, there is a way to do it for less.
Living below your means doesn’t require you to give up those things that bring you the most joy and contribute to your quality of life. It means you find a way to have them for less. Or you decide you can be just as happy by choosing to want what you have already.
Here’s one example for how to cut the cost of something millions of people do every day.
Let’s say you are hooked on caffè lattes or other pricey Starbucks coffee beverages. With a slight adjustment you can cut the $3.39 price tag for a tall (which means small) Caffe Latte in half without sacrificing your Starbucks experience. Instead of a caffè latte, order a strong fresh brewed coffee for $1.75. Request this to be extra hot. Now step to the side counter where you will find a lovely assortment of creams, sweeteners and flavorings for no additional charge. Add enough milk or cream until you have a reasonable facsimile of a Starbucks Caffè Latte. While not exactly the same (a true caffè latte is made with espresso and steamed milk), I can no longer tell the difference and that is saying a lot since I am not one to be fooled easily. What makes it taste even better is knowing I paid half the price.
Living below your means doesn’t equate to deprivation and misery. Actually, it’s just the opposite. Spending more than you earn is the sure fire way to plunge yourself into deprivation and financial misery. Living below your means is a secret shared by ordinary people who have learned how to live extraordinary lives on their ordinary incomes.