Living within your means

Ugh, I hate that phrase. But these days, with the way prices are rising and raises at work are becoming a thing of the past, that phrase seems to hold more meaning.

I received an email the other day from a client on a job I hate to do. I mean, I hate every minute of it. And there are a lot of minutes (about 6,000 of them). Last year, I had sworn not to do it this year. 

And yet I stared at this e-mail trying to decide.

Then, while I was on the phone with someone, they were talking about how a good friend of theirs just lost his job. This was a good job. His wife works too and makes a fair buck but nowhere much as he did and they have a couple kids. But this could be a blow to their lifestyle. Now, I didn't ask if they had money in the bank or anything like that, but the fact that it happened made me think (always a dangerous thing :-))

What would happen if one of us lost our jobs (or in my case, a major client)? That thought has crossed my mind more often these days, but I have been fortunate enough to have been thinking about it long before the economy went to hell.

First and foremost is to live within your means. If you make $30,000 a year, you don't spend $30,000 a year. And I would hope this goes without saying, but you don't spend more than $30,000 a year. Credit cards are not an extension of your income! (Though I know there are cases where there necessity is there.)

Second, build a safety cushion. It doesn't have to be big, just something to have around in case of a job loss, a water heater going out or a repair on your car. Experts recommend about six months salary but who are we kidding, I'd be lucky to have a month's salary lying around!

Third, reduce your debt. That's always a tough one, especially if you have no safety cushion. What works for me is to take a portion of what I can afford and put it in a savings account.

So out of say $400 a month that can go toward credit card bills, I take about $50 and put it in a savings account. It slows up the debt reduction but it allows not having to use credit cards in emergencies and lowers the stress level of not having any backup savings. Of course, that's just my opinion.

I don't like debt, and I do everything in my power to not have any. My car got paid off and I continued to make car payments to myself so that when it finally did die about eight years later, I was able to pay cash for a new car.

Living within my means involves a few sacrifices along the way, but I am much better off for it. I used to say that I'd work at McDonald's flipping burgers if that was the only way to pay my bills. I still believe that. No job is bad enough to sacrifice feeding yourself or your kids.

So what did I do about that crappy job? I took it. I'd have been crazy not to.