Earnings Savings Quadrant

Imagine if you grouped Americans into one of four quadrants based on how rich or poor they were and whether they were living within their means or not.

I am not a sociologists and have not yet researched data to prove this, but my hunch/hypothesis is that the happiest and most secure Americans are those that are living within their means regardless of how rich they are or much money they make. Most Americans are chasing being richer (which is harder to control) in order to achieve happiness, yet all that is needed is to begin to live within their means (which is much more under their control).

The reason why Americans focus on being rich instead of living within their means is the latter takes sacrifice. No one wants to reduce their standard of living, that would be un-American after all. But if they thought about it, it is likely outside pressures that are behind this. "What will my kids think of me if I couldn't get them what they wanted." "What will my friends think of me if I didn't go out with them as much." "That rich person on TV is living the lifestyle I want." "But I really enjoy treating myself, I deserve it."

Certainly earning more helps someone to begin to live within their means but the ironic thing about most Americans is they just increase their consumption level as they make more and still never achieve living within their means. They say things like "we make more so now I can afford a new car." "I can finally take my family on a nice vacation." "I can start living that lifestyle I haven't had before." "I can hang out with friends and be that person that everyone likes being around."

The starting point to change this thinking is to start tracking your personal expenses. Figure out what is causing you to live beyond your means and what can be done to change the situation. It can be difficult and even embarrassing at first to face the reality of the financial situation, but then it will transition to acceptance, honesty, and then action.

And certainly there are things outside our control, like a bad accident or health situation. This is where it sure would be nice to have an affordable healthcare solution as a nation because this seriously impacts people's ability to ever achieve the ability to live within their means. But start with things you can control. 

Starting to live within your means and seeing your savings grow as a result is quite empowering. Not only does it build a feeling of security but it also gives that feeling of freedom from having options. You'll start to see a path where you'll have control to create the life you really want for yourself, not the life society wants you to live.