I have been reading lately more people talking about living below your means as the key to their financial success. It goes back to the basic financial principle for becoming wealthy; “earn more, spend less and save more”. This is fundamental financial advice. Yet, I have been repulsed by the term “living below your means”.

If I look at my family’s situation, we have relatively basic lifestyle. We live in a house that is approximately 2.5 times our income. We do not go out to eat or to the movies often, especially since our son was born. And, we keep our cars until they have 100,000 miles (basically about 7 to 8 years). Thus, many would say that my wife and I are living below our means. Yet, then why do I cringe when I hear others bragging about “living below their means”?

In thinking about it, two things stick out in my mind. “Living below your means” sounds like a deprived lifestyle. It screams “look at what I give up to make ends meet”. Many who say that they are happy about not being in debt which is great. However, if you try to tell a recent college graduate to “live below your means”, you will probably get a weird look and get a reply of “whatever dude”. “Living below your means” makes it sound very unglamorous. Yes, by “living below your means”, you can retire earlier. However, it screams that there is a sense of impoverishment in order to gain a prize in the end or I need to suffer today to be rewarded tomorrow. Even though this is not usually what is meant, it is what it implies on a subconscious level for some.

Second, “living below your means” sounds like you are holding yourself back from real prosperity. Even though it is about being prosperous by taking control of your spending, it is also saying that this is all (the money) there is thus I need to hold onto it otherwise I can not get it back for when I need it. In an article I wrote “Beyond Prosperity“, I discussed three levels of prosperity (or lack there of):

• Limited Universe

• Prosperous Universe

• Limitless Universe

The limited universe is about scarcity. It is about I need to get what I can while I can. Also, it’s the motto live for today (with credit cards) because tomorrow is doomed no matter what I do (punishment for being human).

The prosperous universe is about taking control over my financial destiny. It is about being rewarded tomorrow for what I do today (e.g., “living below my means” will get me rewarded in retirement).

The limitless universe is about having everything I need and want and that it is a continuous flow. There is nothing lacking here. Here, I live in the flow of life (always giving and receiving) because I will always have what I need.

For example, for much of my life, I lived from a prosperous universe (the second level) where I worked 50+ hours every week and stashed the maximum into my 401(k). I went on vacations (usually to my relatives in Los Angeles, Salt Lake City, etc.) where I had a free place to stay. Yet, my drive to save, save, save, stopped me from enjoying life to the fullest because I focused my energy on being frugal. Yet, I was very prosperous. Then I met my wife who showed my how money flows when you allow it. By shifting the focus from savings to enjoyment, whether it is on a vacation to Europe or a day in the park, I see that I am doing what I have always done while enjoying it more. And, because my energy is not focused on every nickel and dime, I now have more energy to give back to the world. The results of this new energy are starting to show up in my financial coaching business with new clients and opportunities that are coming just around the corner. And, looking back, I really shifted my thinking from prosperity to a limitless universe when I quit my job as an actuary to become a financial coach and a stay-at-home dad. Within a year of this, my wife got a large raise and received a grant to pay off 75% of her student loans.

Life is strange in that when we take the focus off of watching every nickel and dime and put energy into enjoying life (including work), our income starts to expand beyond our expectations. Part of it is from moving past seeing life as a struggle (between poverty and prosperity) to knowing that we have what we need, thus we can give the world 110% of who we are. And, when we give, we are bound to receive (because To Give is to Receive). This doesn’t mean that you need to change your spending, yet move your focus from lack to abundance. My wife and I are still living the same lifestyle as we always have. Yet, by focusing on abundance (limitless opportunities), we are able to enjoy helping out different non-profit programs, artists and college scholarship funds with our extra income.

So, I am curious, how do you see the universe? As limited, prosperous or limitless?

This entry was posted on Tuesday, October 10th, 2006 at 2:58 pm and is filed under Prosperity. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.