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If there is one piece of personal finance advice that is agreed on by pretty much every personal finance expert and guru it is “Live on Less Than You Make”. Since much of personal finance is based on common sense you can see why everyone would agree on this one small step. It’s amazing to me that our parents and grandparents and pretty much all of our ancestors followed this advice without even considering it was necessary and yet our generation seems to need reminding. Where do we think the extra money is coming from to cover our red ink and to support us in our retirement?

• Maybe it’s the fault of our government who continues to propagate the idea that they will take care of us, that we are entitled to a certain standard of living and who continues to spend more than they make by a wider margin every year.
• Or perhaps we can blame the media companies who put all the latest gadgets, toys and shiny playthings in front of us continually with the message that if we don’t have these things we are missing out and somehow less successful than our peers.
• Or we can blame the entertainment industry; who tell us that everyone should be living a dream and push us to buy all the trappings of that dream life.
• Maybe it’s our neighbors fault because they keep buying new things for their houses, new cars and electronics and if they have a landscaping service don’t we need one too…

In all honesty we have no one to blame but ourselves if we are living beyond our means. We have control of our financial destiny and no one else is going to care if we are broke when we should be retired and enjoying our golden years. Take responsibility for your finances and block out all the noise from outside. Look inside yourself and take stock of what you really need to make you happy. Chances are it’s not a new iPod or a new BMW or new furniture. It certainly isn’t mountains of debt that only make the banks and credit card companies richer. Chances are many of the things that will make you truly happy require very little money.

It may seem painful initially and many of us shy away from taking a close look at our finances for fear of what we’ll find, but you need to start out by creating a budget to find out how you SHOULD be spending your money. Once that’s done track your spending for a month or two to see if that is really how you ARE spending your money. Chances are there are a lot of little things you buy that aren’t in your budget. These could add up to hundreds of dollars a month (I know in my case they did). By simply becoming aware of where your money goes you might be able to get to the point that you’re spending less than you make.

One thing I can guarantee is that if you’re living on less than you make you’ll have less stress in your life. Small emergency expenses won’t create a huge problem for you because you’ll have the money to cope with them. You won’t be dwelling on where you’re going to get the money to pay this bill or that bill each month. You’ll know that you’re building a solid foundation for your future and I can tell you it will give you both a feeling of relief and satisfaction.

Another thing you’ll find once you’re living on less than you make is increased freedom. When you’re trapped in the debt spiral or living paycheck to paycheck you often have few choices in where your money gets spent or how much of your time you need to trade for the money that you need. Once you’ve gotten to the point that you spend less than you make all sorts of choices become available. The choice to quit your second job or turn down overtime and spend more time with your family is priceless. The choice to get away for the weekend with your spouse or take your family on a week long vacation WITHOUT increasing your debt is wonderful. The choice to follow your dreams, whatever they may be, often only opens up once you have the freedom from living paycheck to paycheck.

If you’re still spending more than you make then I highly recommend you take a look at your finances and make a plan TODAY to get that under control and spend less than you make. It may be a struggle initially, you may feel overwhelmed or like you’ll never be able to make it work, but if you don’t make it work now you’ll end up in a much worse place. Plus I can guarantee that once you get your spending in line with your income you’ll feel more relaxed and more happy overall.