Mr. Usiere Uko, the author of ‘Practical Steps to Financial Freedom and Independence’, says although people are advised to spend less than they earn, they should avoid becoming cheap.
THIS sounds like going against conventional wisdom, it is. It is not a call to spend more than you earn, rather it is a call to step up your game and focus on increase rather than cost cutting. Rather than live below your means, spend below your income and live beyond your dreams. You may be wondering what the difference is. Technically, they refer to spending less than your income, but they mean different things, a whole world of difference.
Living below your means does not engender an abundance mindset which is a pre requisite for experiencing abundance. Living below your means connotes insufficiency, managing lack, poverty mentality, keeping your head down, falling short, making do with less – living below.
Making more money
The focus seems to be more on cutting costs rather in increasing income. If you have a ‘living below your means mindset’, if your income drops, your knee jerk reaction would be to further cut down costs and make do with even less, rather than increase income and maintain your standard of living. You become an expert at where to find the cheapest things, rather and expert at finding where the highest return on investment is. If you are to be really honest with yourself, if you are given the choice between becoming an expert at cutting cost and making more money, which one would you choose? Which one feels better?
You have to spend below your income, that is a fundamental law of financial freedom and independence which you cannot break. If you attempt to break it, you become broke. The issue is, what are you focusing on as you are spending below your income? Cutting more costs or making more money? How can you get to where you want to be if your income does not increase and all you do is piss your wife and children off by cutting more cost? You cannot become rich by cutting cost, you become cheap. Cheap is not where you want to be – that is where you meet the bottom of the barrel.
To illustrate my point, let me use football. Cutting cost is like defending (stopping goals from coming in) while making more money is like attacking (scoring goals). The score line determines whether you win or lose, no matter how good you are in any department of the game. You cannot win the game of football if you only defend and don’t score. At best you will escape with a draw. If you do not attack, there will be too much pressure on your defence, as the play will be in your half. Sooner or later, you will make a defensive error and the opponent will score. If you score five goals and concede three, you have won by a margin of 5 – 3. If all you do is cut cost and do not increase your income, your life will become more miserable. You should be increasing your standard of living, not lowering it. This is the main problem with living below your means – you keep going down rather than up. The word – living below – does not inspire or empower. Instead, you should increase your means. It is actually a matter of choice.
Focusing on possibilities
Lowering your standard of living is not a good place to be. Stepping down from first class to economy class is not a good experience. I am told one of the worst things that can happen to anyone is to be “used to be rich” or an ex-rich man. You used to fly first class, but now you take the night bus. I definitely would not want to have that experience. Rather than think “I cannot afford it”, the right question would be “How can I afford it?” Rather than go down, chose to go up, while spending less than you earn.
The moment you say “I cannot afford it”; you shut down your thinking process in that direction and accept mediocrity, living below your potential. When you ask the question “How can I afford it?” you kick your thinking process into higher gear and begin to brainstorm possibilities rather than limitations. If others can afford it, why can’t you? If others can earn more, why can’t you? They are not more intelligent or smarter than you. You can live life on your own terms and live your dreams. There is fundamental abundance all around us. We may be in the middle of a financial crisis but there are folks still clinking glasses. The Forbes Rich list is reporting new records both in net worth and in the number of billionaires. New billionaires are being made every year. The economy is booming in certain neighbourhoods. The fact that it is not happening in your neck of the woods does not mean it is not happening. You cannot see opportunities if your focus is primarily on cutting cost. Opportunities become apparent to those looking to increase your income. Playing small neither serves you nor anyone.
Live above your dreams
Again, this is not a call to reckless spending. You have to SPEND BELOW your income and LIVE ABOVE your dreams. Keep earning more so that you can afford to enjoy life more. I am yet to meet the fellow if given the option of flying economy class or first class will choose economy. Poverty is not a badge of honour. The purpose of delaying gratification is so that our assets will generate enough cash flow to enable us affording the things we really want. What you focus on manifests. If you focus on cheap, that is what you will get. Cheap stuff is often low quality and often does not last. Cheap can lower your self esteem and make you look down rather than up. If you focus on the top of the range, that is what you will get. What you expect ultimately manifests. If you are to choose what you really want, what would you choose?
Words are very powerful; hence we have to choose our words with care. Living below your means and spending below your income may seem to mean the same thing, but they come from a different place. One comes from the world of lack while the other is from the standpoint of abundance. Stop living below your means. Start spending below your income, and keep increasing your income until you start to live above your dreams. Abundance is where you want to be.
To your massive success!