Living within our means

When I was small, I would see how my dad would do budgeting for the month. He maintained a diary in which he would note down day to day expenses and then at the end of the month he would calculate the monthly expenses and accordingly budget for the next month. He would teach me all of this and always tell me that we should know how to live within our means.

When I grew up, started earning and living independently, at one point of time I was out of control on my expenses. I was using my credit card beyond what I could afford. You know that energy of youthfulness where you want to have the best and have everything. I was too carried away. But soon I realized that it was backfiring me because I was having troubles paying off the bills and I had to break my investments, which was not right.

At that time I started valuing my dad's teachings and gradually I made a shift and started planning my finances better. Though I do not write down my daily expenses, but I do make a broad monthly plan on my expenses against my income. This helps me stay in my limits and not spend what I do not have or would have difficulty paying up.

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Quite a few people end up doing this. We spend what we do not have and then we face difficulties. The problem is that life is so much loud these days and it's like a competition, everyone wants to show that they have the best. Buying expensive clothes, accessories, dining out in expensive places. I will not deny that I do not do all of this, but I always budget for it for occasions and spend accordingly. When the bills soars up the reality hits us that we have gone overboard. Sometimes going overboard we do it to just show off, but as we mature we understand that it is not required. It is important that we live within our means and only spend what we can afford to pay.

Credit cards are very convenient and they can really lure us to keep using, but if we default the payment then the interest that we need to pay on it is killing. It is not worth it at all, and if you fail to pay, it keeps building and you pay much more than what you have actually spent. Once we start getting used to being in debts it is difficult to come out of that hole, we keep getting into it more and more. The other thing I also want to avoid is taking Loans, because the interest you pay on it is exorbitant. I did take a loan to buy a house some 15 years back, I had no choice then, because buying a house was a necessity then and there was no way that I could pay up on my own. But if I calculate the interest amount I almost paid 30% more on my house amount in the form of interest.

We do get lured by the extravagant life these days and the so many options that are available, but we must learn to control on our desires and it's important to live within our means to live peacefully.

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