Last week I crabbed a little about my frustrations of being a cheapskate and on all the things I feel like I miss out on by living this way. Yes, at times it gets quite rough. Sometimes, you just have to talk about it and let go of some steam. You know what I figured out this week after venting last week? I figured out how many incredibly fun things there are about living below your means. Today, I’m choosing to double last week’s negative number because the fun things outweigh the not-so-fun things by at least double. So, on a positive note for this week, here are 10 incredibly-fun things about living below your means, all of which, I’ve experienced first hand:
1. You stop digging a deeper hole
By default, when you start living below your means, you stop digging yourself a deeper hole. When you spend less than you make, you stop the bleeding on a disastrous financial situation. Many people, without even realizing it, are digging themselves a large hole financially that can take years, decades, or even an entire life to dig out of. When you live below your means, you set yourself up to put a stop to any further damage.
2. You get yourself out of debt
Getting yourself out of debt is fun. It’s stressful being in debt. I know because I was in $25,000 of debt just a few years ago after I bought an expensive car right out of college. I still had student loans to pay as well. My first year out of college, I spent everything I made and got myself into the car mess. Once I woke up and started cutting my spending, I was able to pull myself out of that mess of debt. It’s all about cutting your spending and living below your means. That has to come first.
3. You don’t have to borrow money anymore
Borrowing money, by definition, is living above your means. If you’re borrowing money, you’re buying something that you don’t have the money for. It’s pretty simple. Therefore, if you’re living below your means, that means you are not borrowing money. When you keep this up for a while, you’ll have money. When you have money, you won’t have to borrow it from other people (and pay interest) anymore. That’s pretty darn fun if you ask me.
4. You have more money than all of your neighbors
I live in a run-of-the-mill apartment building. Sure, it’s fairly nice and I’ve got plenty of room, a private balcony, a dishwasher and a heated underground garage. But it’s not as nice and/or hip as the places many of my colleagues live. You know what’s neat? I’m probably one of the most financially secure tenants in this apartment complex. It feels kind of good knowing that, too. I’ve heard it said before that it’s better to be the richest person on your block than it is to be the poorest. If you’re trying to keep up with the Jones’, that will likely cause you to go broke. If others are trying to keep up with you, that won’t affect your finances at all. Now that’s fun too.
5. You can set all your bills up on auto-pay
I know people who could only dream of setting up all their bills on auto-pay. Why? Because they are barely squeezing by and doing so would either put them under serious stress or cause them to overdraft their bank account regularly. When you’re living below your means, you can keep a comfortable amount of cash in your account at all times and never have to worry about over drafting your bank account. It hasn’t happened to me once and I’ve had all my bills on auto-pay for several years now. In fact, I don’t think my bank account has even been within $700 of being over-drafted since I set everything up automatically. Doing this allows me to have fun and not have to worry about my bills.
6. Life is less scary
Imagine this. Your car is getting up there in miles. What if something happens to it on your next trip out of town? What if the engine blows up or the transmission goes out? Are you prepared for that? What if your mechanic tells you it’s time for new tires during your next oil change. What if your computer crashes and can’t be repaired? What if you drop your new iPhone 4S in the toilet and you turned down phone insurance? You may have to dish out hundreds or thousands of dollars very unexpectedly as soon as next month, next week or even tomorrow. Ouch. Well, it’s not scary when you live below your means because you have the money to handle it. You have an emergency fund. So go ahead, get out and have fun.
7. You aren’t scared of losing your job
Here’s a scary thought for almost everyone. You walk in to work tomorrow and find out that your department will be cut or outsourced. Or perhaps you have been struggling for a while to find passion in your work and they have noticed your lack of focus and will be letting you go to search for someone who better fits the position. Whatever the reason, your relationship with your employer is likely at-will, which means, they can let you go whenever and however they please (with the exception of a protected reason). This can be scary when you are living paycheck to paycheck. It puts you into panic mode. It can result in taking the crappiest of crappy jobs as soon as you can just so you can keep the lights on and food on your table. With an emergency fund, which comes from living below your means, you’ll have the funds to weather the storm of being let go from work. Sure it will be inconvenient because you’ll have to job search and learn something completely new, but it won’t put you into panic mode. You will have comfort in knowing you are ready for something like that if or when it happens. Maybe instead of jumping on the first crappy job you find, you can finally get the chance to pursue your passion and start your own business? That can only happen when you have been living below your means.
8. You can have fun that’s paid for
The next vacation I go on will be paid for before I go. The fun that you get to treat yourself to when you have been living below your means is paid for in cash. The money for your fun doesn’t get borrowed from someone else. It’s fun that’s deserved and earned. Fun that’s borrowed for isn’t earned. It just doesn’t feel as good either, knowing that you’ll have to work in the future to pay for it. Yuck. Paid for fun is much more fun!
9. You see a lot more opportunities
I just bought a domain name this morning for a second site that I plan to create. It’s going to be every bit as good as this one but more broadly focused on things outside of money. I see a ton of opportunity for what I can do with these sites in the future. I’ve been seeing a lot of opportunity in general lately in regard to almost everything. I love the idea of building a business from scratch. I love the idea of learning how to start making money on my own. I love the idea of going to the Financial Blogger Conference in September. There, I’ll have an opportunity to meet many of the people I’ve been getting to know over the past 5 months. I can’t even foresee all the opportunity that will be available to me at that conference. It’s exciting. I didn’t really see these opportunities back when my life was focused on spending everything I made, showing off my material goods and living large. It was about the goods back then and not about the future possibilities and opportunities. Now, it’s different because I live below my means.
10. You can take more risks
Even though I’m not taking many risks right now, I know I could if I wanted to and that’s fun. I live far enough below my means that I could actually hire someone full time to work for me, on anything I would want done and cash flow it every month. That’s kind of exciting, but I haven’t figured out how that would possibly be a good idea, yet. Maybe once this blog and potentially my next one get off the ground, I can hire someone to help take it to the next level. I am in a position to do all sorts of crazy things since I have that cash flow surplus as well as a healthy bank account from living below my means for just a few years now. No, I won’t take stupid risks, but I may take smart, calculated risks. I want to win and being able to take risks when the opportunity is there for success is crucial.