Growing up, I was aware that we were a middle-class family. We had enough to meet most of our wants, though getting everything we desired was out of reach. I would often see my mother meticulously balancing our checkbook, and this early exposure affirmed the role finances played in shaping our family’s lifestyle. However, it was only well into my adulthood that I realized the extent of the financial challenges my parents faced from time to time.
They were adept at managing their budget, to the extent that I never suspected any instability in our financial standing, let alone question our middle-class status. I am grateful for the fiscal lessons my parents imparted, which have been instrumental in my understanding of finances. Even though my husband and I might not make our way to millions, within our 5 years of marriage, we’ve doubled our annual earnings, paid off a $45,000 debt and bought our first home, managing the down payment in one of the country’s priciest real estate markets.
Here are three fundamental financial principles that we adhere to, helping us achieve these milestones:
1. SPEND LESS THAN YOU EARN
A key reason we’ve succeeded financially is our commitment to living within our means. If we found our budget being stretched, we would minimize our expenses by eliminating spending extras. Living frugally isn’t easy, but it is crucial for ensuring financial stability.
Here’s how we heeded this monetary maxim: we downscaled from a one-bedroom apartment to a studio guest house—a snug dwelling for two adults and a hefty dog!
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2. ALWAYS AIM TO INCREASE YOUR INCOME
My husband and I continually strive to augment our earnings. We never rely solely on our annual salaries from our primary jobs. This means we pursue our passions on the side for additional income. For me, this entails freelance work; for my husband, it implies teaching auxiliary fire courses.
We also proactively seek workplace raises by tackling extra responsibilities, volunteering to take on additional tasks and putting in overtime hours. Through these initiatives, we’ve managed to double our yearly income within just five years.
3. RESIST THE TEMPTATION TO KEEP UP WITH THE JONESES
Out of all the money principles, this is perhaps the toughest but most crucial. To live a debt-free life and attain financial security, it is vital to focus on your own financial goals rather than get influenced by others’ spending habits.
In today’s world, flaunting lavish purchases on social media platforms like Facebook is commonplace, and it’s easy to feel envious when you see others basking in luxury. But the key to genuine financial peace is to resist the urge to keep up with the Joneses and concentrate on your own situation. Remember, if the grass appears greener on the other side, it’s time to tend to your own lawn.
What financial principles guide your life? Which guidelines given here do you plan to adopt?
