Personal Finance Management: Living Below Your Means

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The one advice that is repeated all the time for entrepreneurs and people who are willing to build wealth is: "Live Below Your Means"

You can't imagine what this principle can do to your financial position if applied

Living below your means making 60,000 a year but spending as if you earn 40,000 only

When you live below your means, you find that you have money to save, you have an emergency fund, and you have money to invest, you may have a retirement plan too

The sad truth is, most people live above their means, they spend more than they earn, and what makes it easy is a credit line that makes you fall into a debt trap without you even realizing it.

Living below your means has endless benefits for you, because you have a sense of freedom when you save money, you're not stressed all the time because you don't know how well you be able to pay off your debt

The secret sauce to living below your means is never buy to impress, and there will be a separate lecture for this topic, because it's one of the key points of being financially free.

I grew up with a father who lived way below his means, he bought a Toyota when he could've easily bought a BMW or a mercedes

Because my father lived below his means, we always had a stable financial position, we never were affected by any kind of financial crisis, we always had a great emergency fund which meant security for us, and we never ran out of money, we never were stressed about being in debt, and we always felt rich not because we have all fancy products, but because we know deep down we're more financially stable than anyone

If you're serious about wanting financial freedom, living below your means isn't an option, it's a must,

and while you might say: my salary isn't even enough because I have a lot of needs, you have to find a way to save money of your salary, so that you can quit your job soon and still be financially free

If you don't live below your means, you'll fall into debt, and you'll never build wealth, but don't worry, the next lectures will help you do so by understanding other relevant lessons