Summing it up as "live below your means" is perhaps the most accurate way that anyone can talk about saving money.  After all, you can't save more than you earn, and the math is actually fairly simple: Earn - Spend = Save.

The trouble with that is it isn't so easy.  We can say "live below your means" and some very smart people can hear us and still not do it.  The world is filled with marketers, highly trained individuals whose job it is to play on our natural tendencies, the "mistakes" that are built into our brains that keep us playing the float and blaming poverty on others.

There are many things we need, but a cultural shift is one of them.  We barely educate our kids about finances in school: why not make budgeting and simple concepts about wealth part of our curriculum?  When we built Thrive, it was some incredibly smart, incredible well-educated people were coming to us and saying "look, I've got no clue what I'm doing."  They were making big money but it still wasn't enough, or they were making small money and then it REALLY wasn't enough.

So the question becomes how do we take "live below your means" and enforce it?  How do we make the cultural shift that we'll have to make to get there?  I proposed education as one possibility (and certainly through Thrive, management is another possibility)...I'd be interested in hearing what other thoughts people had about how to change things.

http://www.justthrive.com

I completely agree about the lack of financial education.  I think all high school seniors should have to pass a 'personal finance' class before they are allowed to graduate.  Things like how to budget, how the banking systems work, the basics of compound interest and how to live with what you make.  I didn't figure out a lot of things until I was in college....and I mostly figured them out by making big mistakes and having to fix them.  We should do a better job of letting future generations know how to manage their finances.

Matt@Thrive...I've never heard about your website or tools...but I am checking them out now and I am very excited!!

Living below your means is certainly no new idea.

In Charles Dickens' novel "David Copperfield," Mr. Micawber gives some shrewd advice: "Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."

The problem is people's wants are always larger than their pocketbook. And today's marketing hype has people believing they "deserve" to spend what ever they want. After all, it's "priceless."

Anytime someone whines about their financial situation, my advice is the same: "live below your means" and I get one of two responses:

1.  I don't make as much as you do OR enough to live on.

2.  I am not as smart with money as you are.

Both answers are BS.  My response back is, I didn't fall backwards into a well paying job, and I wasn't born with the financial genius gene.  I worked my way up over 15 years...earning less than half what these people earn today.  And I can add and subtract.  Difference is, I worked 2-3 jobs to make ends meet, and actually made real sacrifices.  No vacations.  No going out.  No shopping sprees.  No new cars.  No cell phone/computer/internet.  

I got all the fun stuff after I started earning a decent salary and had my cushion in place.  But no one wants to hear that.  They are just bent that I have a "cushy" life and they are in debt.  

Matt nailed it in the first few words Live Below Your Means. I may not have a yacht in the middle of the Carribbean. And no I may not work at a posh job. But I've been smart with my money. To the point that every year I always ask my Mom how much do you need this year for Christmas Shopping and naturally she hates taking it from me. But after raising me I think shes worth more than I can give her. I've always said that even if my rich relatives became poor. I'd help where I could and I would.

I do not like the phrase "live below your means", one should be more positive. How about "live within your means" or "live well within your means" or "live within while increasing your means"?  

Why do we need schools to teach what the PARENTS have the responsibility to teach?

In terms of marketing "stuff", I guess I am lucky to be predisposed to NOT follow the herd. Never gave a darn about keeping up with the Joneses or what other people think about how I choose to live.

 This is all nonsense.  When you say poor, mean it.  Obviously none of you have ever been really poor.

 When you don't have any money  you don't have the luxury of using most of these suggestions.  "Live in a cheaper place" forinstance.  I live where I do because it is the only way to get to my (two) jobs.  My city (New Orleans) has practially no public transportation and after 11 pm all the buses stop running, that would mean a $10-12 cab home if I lived in a cheaper neighborhood; that's usually what I make in tips which is what I use for my daily expenses such as basic everyday groceries.  I'm to poor to own a car; between the insurance, gas and general upkeep it was too much plus a repair bill used to take months to save up for while the car sat parked on the street.

 What really burns me is how easy it is to tell someone to "save" or "live below their means" when the reality is that there simply isn't enough money coming in to cover what needs to go out.

 For 25 years I was an emergency medicine X-ray tech.  Now, due to my age (55), the lack of jobs in this area, and my health problems I can no longer work at my trade.  I am working as a tour guide which I love but is dependant on people coming to our city and the economy is killing us here.

 I have no credit cards, its cash or debit at the store.  I own a bicycle that I can ride to the farmer's markets on Saturday mornings, but the streets here are in too bad a shape to safely ride on after dark.  So I walk everywhere, which, by the way, is great for your body but it does put major limits on how much you can carry home; you need to plan a couple of days ahead.

 The laundromat is 12 blocks away, thats a 24-block walk pulling the whole thing in a trundler so it takes all day.  If there is too much stuff I have to cab it over so the whole thing (about 5 washers!) costs me about $25-30.

 But here is the nitty gritty:

  Rent $850, utilities ~80, medicines (I am on insulin) ~325, income $425/wk (at best with no taxes taken out yet).  Add laundry and the odd thing that pops up, (a heating pad for my feet in my apartment that has no heat).  Then on top of that I have groceries, cat food, household items and bath stuff which I get once a month by teaming up with a friend and going to Sam's Club.

 This equation only ends up one way:  Monthly income = X, monthly expenses = $;  X-$=0 or negative.

 I haven't eaten out in a year, don't buy frivolous things, and my best pair of sneakers have the entire bottom rubber layer worn off.  I mend ripped pockets, popped-off buttons, etc., but the time comes when clothes simply fall apart; what do you do when you can't afford to buy new ones?  This is not a trick question.

 Thank god I have never had any children, I simply can't imagine how tough it is to have to deal with that.

 I don't mean to be rude, but I get so angry when I'm told to "cut back" or "put something aside" and that will solve all my problems.

 Finally, no, I don't receive any public assistance.  Want to know why?  I make too much money!  What a joke.

PennyPusher  -  New Orleans

Holly--how about getting a roommate??  Split the rent and that will save you $425 monthly right there.

There are also programs out there that will help with your medications/insulin supplies.  Ask your pharmacy where you get your supplies.  They or your doc might be able to get you samples that would take the edge off the cost.

For food check with your local food pantries or your church.  For clothes ask your church or neighbors.  When I graduated college broke as a church mouse and no professional wardrobe I just asked around if any of the ladies had a nice suit they weren't wearing anymore that I could use for job interviews.  The kind ladies set me up with an entire professional wardrobe of gently used really nice clothes, shoes, scarves, etc.  What wonders it did for my self-esteem :)  I know it's tough to ask but folks are willing to help and they aren't mind-readers.

If laundry is such a hassle how about carpooling with a neighbor??  They are probably in the same situation you're in.  Or if they have a washer/dryer ask if you can do your laundry at their place for the cost of what you would pay at the laundromat.  That would save you the time and the walk.

Not to be a hard a$$ but I was in your shoes as a broke college student where often I had to decide whether to put gas in my car or food in my stomach...sometimes it gets to the point where you really have to get creative.

@Holly

"Obviously none of you have ever been really poor."

Well, I was homeless (briefly); spent some time sleeping in my car (which I was still paying off), didn't know where I was getting my next meal, plus I had to pay for my wife's medications (she's disabled), which took most of my income.  I'd say that was poor.

The reason why I was poor for so many years was because I spent a lot of time wallowing in my own misery, blaming others for my problems and I didn't know the first thing about managing my money.  I had no work where I used to live, so I moved halfway across the country (where I knew literally nobody) to get work.  No, it was not easy, but it helped make me the person I am today.  I am not wealthy by any means, but I know I never want to go back to living the way I once did, when financial mismanagement, poverty and bill collectors ruled my life.