Living within your means isn't nasty
Posted
Jan 30 2008, 09:24 AM
by
Karen Datko
This post comes from Philip Brewer at partner blog Wise Bread.
How bad could things get? The New York Times asked that question about the economic situation. It's a good question, but they gave a really bad answer.
Here's what The New York Times had to say:
"How bad could things get? Pretty bad, say many economists. Not so bad that your grandfather's prescriptions for enduring the Great Depression need dusting off, but nasty enough to force many Americans to get reacquainted with living within their means. That could make life uncomfortable."
OK, the title of this post is unfair. Peter S. Goodman (the author of the piece) didn't say that living within your means is nasty; he said that about the economy. He said living within your means is "uncomfortable," but that's still completely wrong.
Living within your means is the only comfortable way to live.
Over time, living within your means eliminates all your financial worries -- no worries about debts, no worries about making ends meet, no worries about retirement.
I have no idea what Goodman's grandfather had to say about surviving the Great Depression, but my relatives of that generation had plenty of good, sound, timeless advice. In fact, "dusting it off" and sharing it with people is a good bit of what Wise Bread is about.
Most of this country's economic problems stem from two sources -- people's desire to get something for nothing and people's desire to live beyond their means. The first leads to small foolish actions, like buying lottery tickets and day trading. The second leads to larger foolish actions, like borrowing money to take a "well-earned" vacation.
Put both together and you can get some really big foolish actions, like buying houses you can't afford, hoping to flip them at a profit.
We'll know things are getting better when "living within your means" is once again viewed as common sense, and not as the sort of old-hat notion that might be dusted off and considered when things get nasty.
Other articles of interest at Wise Bread:
"Raise your standard of living by focusing your spending"
"And did you do it with respect?"
"Did I choose the wrong profession?"
