From the course: Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence

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Lesson 2: Live within your means

Lesson 2: Live within your means

From the course: Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence

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Lesson 2: Live within your means

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- [Instructor] Two, live within your means. This notion is so outmoded that some listeners might not even know what it signifies. To live within your means is to buy only what you can prudently afford, to avoid debt unless you have an assurance that you will be able to pay it promptly, and to always have something put away for a rainy day. It was a quite fashionable way to live a few short generations ago, before the expansion of credit. There are two sides to the coin of living beyond your means. The shiny side is that you can have everything you want right now. The tarnished side is that you will pay for it with your life in interest. Buying on credit, from cars, to houses, to vacations, often results in paying three times the purchase price. Is going to Hawaii for two weeks this year worth working perhaps four additional months next year to pay it off? This doesn't mean you have to cut up all your credit cards. You…

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