How Far Below Your Means?

An interesting question that many families ask when they're trying to work out a budget is:  How far below my means should I live?  This is of course a complicated question, because figuring out what "your means" are isn't obvious.  It also indicates a type of thinking that may become counterproductive.  Instead of thinking how much can I save, it indicates thinking about how much you have to save.

The real key to being financially stable is to start viewing saving as pleasurable instead of a painful act.  You need to start seeing one-hundred dollars in the bank as more appealing than a one-hundred dollar television set.  If you look around at people who are truly secure, they tend to be people who have learned to find satisfaction in saving instead of spending.

Some people think that their love of spending is simply an ingrained part of them.  This is typically a rationalization for a lack of discipline.  They've grown accustomed to wasting a certain amount of money and they don't want to give that up.  Interestingly saving is much like dieting.  If you stop looking at it as a punishment and simply look at it as a new lifestyle, anyone can start enjoying the security that having money in the bank can provide them.

Thus for those asking how far below their means they should live, they should really rephrase the question as:  Which of my expenses are truly necessary?  Once you start giving the benefit of the doubt to saving instead of spending, you will notice a huge difference in how you view the world.  Instead of thinking of each purchase as needing to find a reason why you shouldn't buy it, you should look at each purchase as having to prove that you should.  

The right answer to the question of how far below your means you should live is - as far as you can.