Your Means is Something You Should Not Live Up To

There are a lot of things to live up to in this life. You want to live up to your parents expectations. You want strive to live up to your potential, and you want to live up to your responsibilities, but the one thing you don't want to live up to is your means. Your means is a term for your financial capability. Living up to your means indicates that nothing is being saved and you are not prepared for the future. Living beyond your means is a recipe for disaster.

Listen up. I know you've heard this a million times before but the present state of the economy should be telling you something. That something is that your paycheck is not guaranteed and your income today may not be your income tomorrow.

I'm sure that the last thing you want to hear is another inspiring story but you're going to hear one anyway. I worked in software development doing contract work for to the Navy for thirty-seven years; the last twenty-seven at the US Naval Research Laboratory in Washington, DC. My wife worked as Chief Deputy Clerk of a federal court also in Washington. We were doing fine and we had plenty of money to afford new cars and big trips but we exercised a little self control.

We didn't scrimp; we did go on a couple of seven day vacations a year and we lived comfortably. We bought cars when we needed them and kept them maintained. Cars lasted a minimum of ten years allowing us to pay cash for a car when one was needed. We used a credit card for the convenience of not carrying cash; we still trust it more than a debit card. We pay the balance every month and never pay interest. We have only the mortgage and standard upkeep bills each month. Our computers are not state of the art; I can't play the latest computer games. Our cell phones are used as telephones and they are not the centers of our lives.

Our long term plans included a maximum investment in our retirement funds, buying saving bonds and investing in IRAs. When it came to our retirement funds; the logic was clear. We could invest more without feeling the pinch because you don't pay taxes on the money. For the average person your $100.00 retirement investment will only cost you $65.00 to $75.00 out of your check and, if your company matches a portion of your investment, it is like getting free money. I will repeat the operative part, free money!

My mother suffers from COPD, Alzheimer's, and 90% hearing loss. She could no longer live on her own so we brought her to live with us. This helped my wife come to a decision of when she should retire; it would have to be sooner rather than later. In that same period my work at the US Naval Research Laboratory seemed to be winding down. We noted this and prepared for the worst. Thankfully my wife's thirty-seven years of service to the US Judiciary gave her a darn good pension; something private sector companies ducked out of long ago.

I lost my job two days before Christmas in 2008. I was still three and a half years away from retirement and I was on the street. Being in one job for twenty-seven years showed stability but it put my programming skills ten years behind the times. Without a major degree, having old skills, and being close to retirement; I wasn't at the top of the desirable list. We would have been in a tough position if we had not prepared.

Our long term plans, our day to day fiscal responsibility, and our concentrated effort when we saw the writing on the wall not only prevented a struggle but it actually totally took the pressure off of finding another job. I am now in a position that allows me to take a good job if I find one that suits me or I can concentrate on my writing.

This was all made possible from living for many years below our means. Whatever you think you can spend for a house; knock twenty-five percent off. If you want a new car every three years; make it every five; believe me it won't hurt a bit. If bad times hit, you will be ready. If they don't, then you will party like a big dog in your retirement.