Live for today but prepare for tomorrow. It’s not my motto in life because unfortunately I don’t live by it enough, but I will say this: I aspire to live like this as much as I possibly can. And I try to live like it in all aspects of life, but today in particular, I want to focus on how money falls into that equation.
I’ve always been a saver
Since I was a young lad I’ve always been into building piles of money. As a child it began with dollar bills. Every single time I managed to save a buck I’d put it in a rubber band. I used to love to watch that little pile grow. Even with coins, I’d love getting to the point where you could fill up an entire one of those coin paper rolls. Hell I used to buy packs of gum and sell slices for a quarter each back in elementary school (until the school forbade me from doing it). Honestly I’m not even sure where the instinct came from. I wasn’t necessarily taught to be a big saver. But I also remember that while I loved watching my money grow, I never skimped either. When I had enough money, I would always treat myself to something. Could have been a candy bar. Could have been spending a quarter to play a video game. I always knew that once the money was earned I wanted to reward myself. At the same time however, I always knew that I wanted to keep building the pile.
Income never mattered
As I got older my mindset never changed. I would always save money because I wanted to watch the pile grow. But one of the things that’s important to note is that no matter how much money I was making or spending, I was always saving, always. And I think that’s a key reason why I’m debt and mortgage free at the age of 42. Let me give you an example. The first time I moved into New York City, I got a job that paid me $40,000 per year. At the time I was renting out a studio apartment which would cost me $1150 a month. Tack on utilities, cell phone bill, gym membership, subway costs, food costs, and everything else, that isn’t a whole hell of a lot of money to live on. Excluding taxes my paychecks weren’t exactly fat. Yet somehow I remember that I was able to put away between 100-200 bucks a month. I just made sure that I did it. If I had to cut back on something I would. If I had to cancel an event, I would. I just knew that in one way or another I had to get that 100-200 a month into savings.
As my income grew
As I started to make more money, I simply put away more money. As long as I was in that studio apartment, paying the same rent, I didn’t really change my lifestyle at all. I might cancel certain events less. I might treat myself to a little something extra once in a while, but I was still putting away that same 100-200 a month. Eventually that 100-200 a month grew a little bigger. The reason is because the “upgrade” in lifestyle was only so slight but the discipline to save remained the same. But here’s the thing. What if I got laid off? What if I had to live in a much cheaper place? What would I do then? I’d start over. Plain and simple. At that point I had enough of an emergency fund to last a little while as I tried to find a job. Or at that time, I could have lived with a friend, parents, any number of things. All the while I’d try to make sure that the money saving capability was intact. That’s the constant. That’s the thing that never changes: save money no matter what.
My situation today looks very different than when I was in that studio apartment. However, I’m still saving money. It’s all relative. I make multiples of what I originally did. I live in a house that’s over 10 times bigger than that apartment. I have a wife, two sons, two cars, expenses that are north of 5 figures every month. But nothing’s changed. My money saving capabilities have only risen more and more as I make more money. It’s because my lifestyle is always less than my money saving situation. But that doesn’t mean I live cheaply. Far from it. I’ve just always stuck to my guns and tried to save way more than I spend. And guess what? If I lost all my income today? I wouldn’t all of a sudden try to keep my house. It would suck but I’d downgrade. I’d sell my house, move to a more affordable one, and continue to be able to save money.
Live within your means
Look, I’m not saying that this is all so straight up and simple, but I am saying this: live within your means. It’s never about what you make but rather what you can put away. But you also have to be aware of the fine line between putting away money at the expense of enjoying your life and actually enjoying your life. In the same token you have to be aware of the line between enjoying your life and enjoying your life at the expense of putting away money. Those people who tend to have the most money and the most positive relationship to that money understand that money can be a great thing, but it’s not the only thing. It can enhance good times, but it can’t simply create them forever. It can provide and it can do a little more than that, but not that much more. Not so much more that you should be overspending. Living within your means means that you adjust to any financial situation so that you have control over your money and that it doesn’t control you. I once said that if I made a million dollars a year that my life wouldn’t change. I meant that then, and I mean it now. Sure I might buy some more stuff. I might go on an extra trip. But would I buy a mansion just because my credit says I can? Hell no. That’s living in your means. It’s being self aware while always having the knowledge that I’m going to be saving money, forever.