Living Within Your Means

An editorial by P. J. O’Rourke, the editor of American Consequences, touched on a subject that had us thinking twice about the booming American economy and individual responsibility. He writes about the government shutdown and its effect on a married couple that happen to be senior managers in different departments of the U.S. government. He estimates their salaries to be $200,000 to $300,000 annually, putting them in the top 5% of American earners. Yet, during the shutdown, they were interviewed while standing in line for free food at a pop-up market run by the Capital Area Food Bank in Washington, DC. 

It’s shocking to realize that a recent study of 25,000 American adults shows that 6 out of 10 working adults are living paycheck-to-paycheck or, even worse, are accruing debt and saving nothing for emergencies.

Those that do save for the unexpected, the study shows, think that $2,000 is the right amount for a 3-month emergency fund. 

Earning more doesn’t seem to matter either. As incomes rise, the pattern of spending the entire paycheck every month continues!

After some research, we were able to list 7 warning signs that you’re living beyond your means:

  1. Carry credit card debt
  2. Do not contribute at least 5% to a savings account
  3. Have less than 3 month’s pay in an emergency fund
  4. Have no emergency fund at all
  5. Lease a car you can’t afford to buy or finance
  6. Have paid overdraft fees
  7. Don’t budget

If the government shutdown did any good at all (and we don’t mean politically), it may have us thinking about how to live within our means so we never have to take a handout meant for the truly poor, unlike the government employees in O’Rourke’s story. We can all live within our means and still enjoy life — it just may take a little imagination and willpower.