The point: Learning to live within your means is discipline you have to practice. Financial catastrophe always strikes, and having the necessary skills already mastered will mean the difference between dealing with it and moving on or being overwhelmed and giving up.

“I’m getting by. The bills get paid. What’s the point of restricting myself to a budget?”

Rein in your surprise, because I actually have an answer to that question: it’s so easy to spend more than you earn, shifting the shortfall between credit cards, consolidating to a line of credit that’s growing in barely noticeable increments, relying on next year’s tax return to pay it off and then having to use it for something else instead.

It’s so easy to run merrily through the rainbows and unicorns of life, ignoring what your money is doing because you’ve always had enough.

So easy, that is, until a crisis hits.

Let me illustrate with a purposefully imperfect example: karate (with thanks to +Jackson Middleton for the idea.)

In karate you practice daily because you have a goal in mind: you want to be able to do all the things that a black belt does. You want to progress in skill. If you stop practicing, you can’t earn the next belt, but it’s pretty unlikely that some masked ninja is going to jump screaming out of the air and attack you on the sidewalk next Saturday (I hope.) Unless the world is a significantly different place than I think it is, you’ll never encounter a real-life moment that will make you sorry you didn’t practice karate more diligently.

The screaming masked ninjas of money are the broken washing machines, the car repairs, the trees falling on houses, the sudden layoffs, and the prolonged illnesses that happen without warning and quickly lay waste to your chequing account, your plans, and your credit cards.

The ninjas will come. If you haven’t been practicing your skills, an event that would have been a temporary setback will instead be catastrophic. You’ll survive, because that’s what people do. But wouldn’t you rather have been prepared?

Wouldn’t you rather practice living within your means, and – as a side benefit of all that discipline – build wealth and all the flexibility and choice that comes with it?

 

 

 

Sandi Martin

Co-Founder, Financial Planner at Spring Financial Planning
Fee only financial planner. Former banker. Money nerd. Curmudgeon only on days that end in "-day"

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