Living Within Your Means

So your dad and I learned a very valuable lesson this week about living within your means. We almost dug ourselves into a very deep hole! There was a really cool house near your grandma's that I looked at last weekend and dragged your dad to go look at last Monday. The next thing you know, we're talking to loan people, real estate agents, and a few days later, we were signing papers to put in an offer.

Now here is the kicker: not only do we already own a house, we weren't even really LOOKING to move for at least a year or two (per our previous discussions). But we got overly excited and never really stopped to think what kind of a bind we could get ourselves in financially because we've been fortunate enough to be able to afford everything so far. Luckily, the DAY we were going to sign the offer (which I think would have been accepted), we finally got a reality check when we sat down and looked at what we both brought in monthly. Then we subtracted bills, taxes, mortgages, and thought of worst case scenarios (someone loses a job or we can't rent out one of the houses). It's never fun to look at worst case scenarios, but it's a necessary evil. Well what we figured out was that it would be thistight for us to buy this home and own two big homes. So as much as we really wanted this place, it just wasn't a good time.

I've been in this boat before, when I was younger and less experienced. Thanks to credit cards, it was fun to be able to buy things and to never have to say no to things you wanted. But sure enough I got myself into a situation that took a few years to correct. Thankfully, I thought of that experience this week, and that situation did not have to play itself out again--which would've taken more than just a few years to correct!

The thing is, it's not easy to live within your means, because it does take some discipline. The trick is knowing what your limit is, and the answer may not always be what you want. Yes, spending is fun. Yes, it's great to be able to buy things. Yes, going out is terrific. But don't forget to stop and take a look at your lifestyle once in a while. Is it more than you can handle? Can you be saving up more? Is there debt that should be paid off? Someone I know once told me that in his younger years, he loved getting a new car every few years. But now he wishes he didn't waste all those thousands of dollars on cars. And this is from someone who loves luxury!

I think after my initial financial mistakes in my younger years, I learned how to manage my money a lot more carefully (it helps that I get those genes from your grandma, an accountant). I still enjoy a very good life, don't get me wrong, but I think a lot of that has to do with the fact that I was and am disciplined about how to spend my money. So learn from mistakes early on, or better yet, learn from mine and save yourself a lot of headache in the future.