It seems obvious, doesn`t it? Spend less than you make. Easy to say, hard to do. Why you must spend less than you makewalking up the down escalator or swimming upstream.

But, you may argue, why bother? With unlimited sources of consumer credit that allow anyone to have just about anything, why settle for such an old-fashioned way of life? Why struggle against the flow when going with it is just so much easier? Why not get everything you want now so you can enjoy life to the fullest?

Why? Because it doesn't work.

Spending more than you make is like chaining yourself to a moving treadmill. At first you can keep up with the payments, the debt. But each time you spend beyond your means the speed begins to increase. In no time you are out of breath, gasping for air. But still the speed continues to increase. It seems as if there's no way off.

For your health

The stress of financial anxiety is deadly. It'll kill you. It's a proven fact that people who have heavy credit card debt have more health and activity limitations due to the stress.

Stress increases levels of the hormone cortisol, which can lead to or worsen heart disease, high blood pressure, diabetes, migraines, weight gain, digestive disorders and even some forms of cancer.

Tossing and turning at night with visions of screaming collectors and mountains of debt dancing in your head can do more than simply rob your sleep.

In a study reported in the Annals of Internal Medicine, researchers from the University of Chicago found that insufficient sleep cuts levels of the appetite-regulating hormone leptin. Low levels of leptin are associated with obesity. The upshot of sleep deprivation? Weight gain.

For your future

You're going to live for a long time. Count on it. Medical science is improving your chances of longevity every single day and that means you have every reason to believe that one-third of your life will be spent in retirement.

So, you think you have trouble making ends meet now? How do you plan to do that without a paycheck for 20, maybe 30 years?

You cannot duck this glaring fact of retirement: There is less money. If you do not learn how to spend less than you earn now, believe me it will not come automatically the moment you enter the wonderful world of the retired.

Whatever your age you must start thinking about this now, not then.

Sit down right now and make a realistic estimate of how much money per year you will need in retirement. Will you have a house payment? What can you expect in Social Security income (check your Earnings Statement at www.ssa.gov). Any pensions or retirement accounts?

Assume things will be a lot more expensive by then and inflation will nibble at the buying power of your limited resources. Step back and see the big picture.

Having a plan, even if it's imperfect, will make you much better off. Spending less than you make opens the door to saving for the future. If you can't afford the house, sell it. Can't afford those car payments? Trade it in for a clunker you can afford. Get over your notion that money and material things are as important as you believe them to be.

For your joy

While it's important that you take a big-picture view of your life so you can prepare for the future, enjoying the present is equally important. Living below your means opens the way to enjoy peace, joy and contentment now. Accept the fact that you cannot have it all, but you can have enough.

Chris Crowley, co-author of Younger Next Year, says the absence of financial anxiety trumps the presence of material joys. Some people know that from birth. Then there are those of us who need to hear it over and over, all the time.

Spending less than you earn is a formidable challenge. But you can live happily on less than you make if you stop chasing status and things that don't add to the quality of your life.

Living without financial stress is worth almost anything.


© 2005 The Cheapskate Monthly. All rights reserved. Used with permission.

 "The Cheapskate Monthly" was founded in 1992 by Mary Hunt.  What began as a newsletter to encourage and empower people to break free from the bondage of consumer debt has grown into a huge community of ordinary people who have achieved remarkable success in their quest to effectively manage their money and stay out of debt.  Today, "The Cheapskate Monthly" is read by close to 100,000 Cheapskates.  Click here to subscribe.