Living Beyond Your Means

In one of my previous posts, I discussed about my desire to cut my HSBC credit card. I am no longer using it for the past ten months. Actually, I was never vigilant about the financial aspect of my life until I gave birth to my youngest child in April. With two kids, we can fairly afford to give them some little luxuries in life but with an additional kid, we now have to think twice before splurging on our wants. (Milk formula, vaccines and diaper are expensive!)

I have always been a wise spender when I’m buying an item for myself. But when it comes to my loved ones’ whims, I turn into a spendthrift monster. I always feel obliged to please my loved ones to the point of breaking our budget. There were instances when I resorted to using my credit card to purchase an item because I didn’t want to touch our savings. Later, I realized how unwise it was because our money kept in the bank earns an interest of 2% per annum versus the credit card interest at 3.5% per month. Did I live beyond my means? Maybe no, because I could have used the money in the bank to buy the items that I purchased through credit card. I made a WRONG decision in doing so because I lost more money in the process.

Why didn’t I use the money in the bank instead of swiping my credit card then? Because deep inside, I was bent on saving more money but at the same time, I wanted to please my loved ones, too and swiping that plastic made me feel less guilty about spending. I want to correct this attitude of mine while it’s not yet too late. This is all about financial freedom, folks!

Have you asked yourself why, despite the yearly salary increase and bonuses and promotion, you still feel like living from paycheck to paycheck? Maybe the answer is how you manage your money, maybe you are living beyond your means.

When you start to keep up with the Joneses, chances are, you will be trapped in a web of setting your life’s standards with your friends’ or neighbours’. My neighbours bought a new bike for their kids. My three-year old saw the bike and approached his daddy, “Daddy, buy me a bike, please?” My husband, obviously affected by the toddler’s begging, texted me and hinted that he would buy a bike for Adi. I told him that I don’t want to create an impression to Adi that he could get whatever he wants in a snap of a finger. It has always been like this when it comes to Adi. This time, I want to send a message that every purchase should be planned and budgeted. I promised to buy him a bike on November.

When it comes to buying furniture, which one will you choose, a simple yet durable bed or one that is elegant and expensive? If you have plenty of money, satisfy your classy taste and go for the elegant and expensive bed. But if you’re tight on the budget, then choose the simple yet durable bed. Most shoppers are intimidated by well-dressed salesladies/salesmen. Of course, the salesladies will tell you that the elegant and expensive bed is the better choice because they will get a higher commission on that!

If you developed the habit of borrowing money from family or friends to fill in the gap of your budget, then you must really be living beyond your means. Either cut down some of your unnecessary expenses or increase your income.

The bottomline is, live a simple yet happy life. Material things are just add-ons to being happy but being happy is learning to appreciate whatever we have at the moment. Don’t be an impulsive buyer and think of financial freedom all the time!