Life’s Money Rules – Rule 1: Spend Less Than You Earn

Posted on January 21, 2013 by Mary Hunt in Mary's Perspective 6 Comments

My life changed radically 21 years ago when I broke my self-imposed gag order and told the whole world about my struggle with a debilitating spending problem. I had no idea at the time that this would be one of the smartest things I could ever do. By telling my story and owning up to my problem, I became accountable.

Money-Cash-Wallet

Since then, I’ve read and written hundreds of thousands of words on the subject of money management. I’ve experimented with various methods. I’ve addressed audiences large and small. I’ve listened, pondered and asked questions. I’ve collected enough data to choke even a well-adjusted accountant. And I’ve written 22 books on the subject, including 7 Money Rules for Life: How to Take Control of Your Financial Future (Revell, 2012).

During my quest, I have come to thousands of conclusions. My most important conclusion is this: Anyone can learn to control their spending, even in the face of a sudden job-loss or financial challenge. And that is why rule one in my book is: Spend Less Than You Earn.

If you are experiencing financial troubles, it undoubtedly can be traced back to a time when you failed to control spending. Then, the trouble started to grow. For some of us it grew and grew.

I’ve also concluded that regardless of the amount of money we have, there are three main reasons people experience money troubles:

1. Financial problems are rooted in one’s refusal to accept the fact that life is not fair. As long as you feel entitled to material things you cannot afford, you will have money troubles.

2. Financial problems are the result of irregular and unpredictable expenses. When people add up their monthly expenses they don’t think about the things that don’t happen on a regular basis. When irregular expenses creep up, they see them as emergencies or financial crises.

3. Financial problems will never go away as long as unsecured debt is carried from month to month. Credit-card debt has an odd way of reproducing.

Financial ease has nothing to do with being rich. It comes as the result of taking responsibility and by following sound financial principles and rules. And the first place to start is examining your spending and getting it in line with your income.

Whether your financial situation requires a minor correction or a major overhaul, no situation is hopeless. Not even in these recessionary times. No matter where you are right now, you can take control of your finances. You can get out of debt and learn how to live below your means. You can get off the financial roller coaster and stay on level ground where money ceases to be an issue. But you’ve got to follow the rules.

Start by tracking your spending. Until you can get your spending under control, you won’t be able to get a handle on your finances or your financial future. Do it. Start today!

Question: Has spending ever been a problem for you? If so, how did you get your spending under control? Share your experience here. 

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Posted on January 21, 2013 by Mary Hunt in Mary's Perspective 6 Comments
  • Erika M.

    As a naive and uneducated about money matters college student, I allowed the credit card companies who prey on this population to convince me that I “needed”, “wanted”, and “deserved” to purchase items I could not afford, eventually propelling me into a $25,000 unsecured credit-card debt. The first time a bill-collector called me at home on a weekend was my breaking point. I said never again will I put myself in a position where people are bothering me about some money I owe. So I smartened up, got rid of the credit-card debt, and learned (the hard way) to be responsible with how I spend money. Everyday Cheapskate has been a huge help in keeping me on the path. Thanks, Mary!

  • kaetra

    In my early 20′s a department store gave me my very first credit card with a limit of $350. I spent the whole lot in one day on pretty much useless items, including a golden coat-pin. I then foolishly neglected to pay the bill when it came, and spent the next several YEARS avoiding it and ignoring the consequences. Though this $350 lesson was a thankfully small amount, after I finally “grew-up” it taught me a lot about being financially responsible. The only item I still have from that shopping spree is the golden coat-pin. I’ve kept it all these years as a reminder, even though I never wear it and it’s now well out of fashion. I see it in my jewelry box and it reminds me to be financially responsible.

  • Beck

    I read the Sunday paper after I threw out all the ads – didn’t even look at them just threw them out! This kept me from reading the ads and seeing a need I really didn’t have before I read them.. It kept me from being tempted to shop. Such a small thing helped me to curb spending.

  • kjs2013

    We have been working on a debt free lifestyle for 2 years now. We have sold a motorcycle, a camper, several other minor items and have paid off a lot of debt so far BUT it is a long journey. There are a few drastic measures we could take to speed up the process but it is still a challenge every day. We don’t eat out, we don’t take vacations and we both work overtime. We have a teenager who gets it but we are not home as much as we would like to and by the time we are debt free and will be able to let go of some jobs, he will have graduated. At what point is it too much?

  • Amanda

    Spending wasn’t a problem for me- but was for my husband. We were earning over $150k a year yet he wouldn’t pay anything on time and never had cash, often accruing massive late fees for simple expenses such as electricity bills. I left him and was living on government pension before getting a lower paying job and raising 3 kids. I wrote all my priorities and set a plan to meet them. First was to owe a house and ensure kids didn’t miss out on true necessities such as health, sport and healthy food. I bought a house in smaller town at half the amount the bank wanted to lend me and doubled the repayment each fortnight. I planted a garden with simple fruits and get many of their play clothes from charity shops. Good clothes and wants are sourced pff grandparents for birthdays. 7 yrs later all my kids appreciate money, I’ve almost paid home loan back and I’ve bought 2 cheap investment properties. For us it’s about thinking twice before buying and only getting needs, not wants- and minimizing what we need, such as smaller 3 bedroom house instead of larger 5 bedrooms .

  • http://www.facebook.com/steve.bellendir Steve Bellendir

    I had $10,000 in the bank when I got married in 1979. Didn’t even know what a credit card was. I never mentioned my account until a year later when I had to claim my interest on my tax return. Then my wife got a hold of the money. By the next year it was gone. She used credit cards to live a fancy lifestyle and to “keep up with the Jones”. Had to refi our home 3 times (every 5 years) until she got us in debt for over $100,000 with some 40 credit cards. Then the divorce. Now 5 years later, she is still trying to get money out of me. And tore the family apart. Hope others can learn from this.