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Finances Frugality

One Rule For Comfortable Finances

It’s nice to not worry about money. I’ve spent my entire life focused on reducing my financial footprint out of necessity so I find my current situation novel.

Even so, there are rules that I still follow. Ten percent of every paycheck is placed in savings, and despite encouragement to do otherwise, I still keep my recurring expenses as low as I can keep them. After that, I’ve been allowing myself to splurge a bit on items that I know I will use and enjoy.

Even with allowing a loose rein on my spending, I still spend less than I earn at my public job, so my net worth is increasing. In time I will figure out where I want to invest the excess, but today is not the day.

I follow my rules for a reason. I have learned through hard experience that Life can be unpredictable. One never knows the future so it is always best to be prepared. The absolute best way to prepare for challenging financial times is by keeping your recurring expenses as low as you can keep them even during times of plenty, because it is a lot easier to come up with $500 dollars a month than it is $5,000.

That said, it can be tempting to upgrade your lifestyle when your income increases. You may want a nicer (or bigger) place to live or even a shiny new car to drive, yet while you may be able to afford them at your current income level, that is no guarantee that you will continue to afford them in the future. For all we think we know the future, next week or next month may mean that we have to work for minimum wage just to survive.

I am keeping that firmly in mind as I move forward. I have seen too many people burden themselves with higher rent/house payments, car payments, and even boat payments only to have an injury or job loss send them into a tailspin.

I have preached this rule for over a decade now. I learned my lesson during the Great Recession. When you keep your recurring expenses as low as you can keep them, it allows you the flexibility to go with the flow as financial circumstances change. It can even allow you to work less if you desire. I used this rule to be a stay-at-home single mother for years, and I’ve also used it when I worked as a single parent, because it allowed me to work at jobs that are easily acquired so that I would never have to choose between my job and my kids. I had to accept a low wage at these jobs, but for me the tradeoff was worth it.

Whatever your current income, remember that times can change. You may have a really nice job today, but that does not guarantee that you will have a nice job tomorrow. It pays to keep your recurring expenses low just in case.

It also pays to allow yourself some time to adjust when you find yourself suddenly flush with cash. When you do not allow yourself time to adjust to the windfall, you can wake up one morning and realize that you’ve spent yourself broke. Lottery winners do this on a regular basis.

Don’t be them. Resist the temptation to spend yourself broke each week because you happen to have money in your pocket and more scheduled to come. It is much better to have money left over and the knowledge that you will be okay should hard times come.

Do you keep your recurring expenses low? How do you do it? Do you have any advice for the rest of us? Please share your stories in the comments below.

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I’ve written a lot of books sharing my odd view of life in hopes of helping others. My most notorious book is titled The Shoestring Girl: How I Live on Practically Nothing and You Can Too, but The Minimalist Cleaning Method is pretty popular as well. You can find them at the following places:

Amazon
Barnes and Noble
Apple iBooks
Smashwords (non-DRM)

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2 replies on “One Rule For Comfortable Finances”

I wish someone had taught me this years ago before my husband had to take a nearly 50% pay cut when we had debt plus a 3-month old child. Sudden, forced frugality is not pleasant; it would have been so much easier if we had been living below our income previously.

Oh yes! I felt the same way when a job loss hit shortly after I financed a brand new washer and dryer! It was tight (I went on a “diet” so my kids didn’t know) but I learned my lesson by the time I paid them off. Life can kick you in the teeth. It’s always best to keep your main expenses low.

How did you manage?

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