What does it mean to live a life of luxury within your means? What does it mean to live in luxury. Well, for every person it would mean something different. Wealth on the other hand can be defined as the abundance of valuable resources, assets and money that was accumulated over a period of time.
To live a life of wealth and luxury you have to start living within your means. This indicates that we need to be able to spend less than what we earn. In order to do so you have to forego certain things at specific times. It doesn’t mean that just because you can’t afford it at this moment that you shouldn’t be able to buy it. It only means that you should consider your budget and whether or not you should spend your hard earned money on that specific item this month.
In other words you should weigh up your opportunity costs to buy one thing instead of another. For example when I started working I didn’t have the money to buy my own car. It was just too damn expensive. Bare in mind that I was only earning $300 at the time. Furthermore my parents, unlike others weren’t able to afford to buy me a car. Having a car would provide me with a feeling of independence, something I really wanted at that stage of my life. During that time a lot of my friends were going out, partying every Friday and Saturday night. It was something that I also wanted to do but I wanted a car more. So I had to devise a plan. I had to cut down on my weekend spending in order to save some money for a car. It was really hard in the beginning. Luckily I didn’t have too many expenses back then except for entertainment and the $100 rent I had to give my mom for still living in her house. So to get back to the point, I had to sacrifice going out every weekend by only going out once or twice a month and then save whatever I can towards my car. After about 8 months I was able to save around $1200. At that point I had enough money to start looking at cars in my price range even if I had to wait a few more months to get the car I wanted. My dad was so proud of me and said that he will match whatever I saved and help me buy a car. This was a great life lesson for me, as it taught me that you can have whatever you want in life as long as you have a goal to work towards. Although it is hard to get started, it is a good habit to put some money away every month and after a while you will start to live without that money.
By forming good habits we can learn to stay within our planned budget and save money and live a life of luxury while building wealth, all while staying within our budget.
With my next post I will tell you how to create a budget and how to start building wealth.0