U is for Unemployed

We are always hearing about the unemployment rate skyrocketing, about folks losing their houses and cars, and about the economy being in the dumps. I’m definitely not here to tell you I disagree with that, but I would like to talk about living below your means, something I very, very rarely see.

If Person X makes $50k a year, and can afford exactly $3,500 a month in expenses, why oh why would that person seek out things which ensure their bills are $3,500 a month? If the maximum mortgage that someone can possibly pay and still keep breathing is $1,800 a month, they should seek to purchase a house which would allow them to pay far below that. Why? Because shit hits the fan, that’s why.

I am always very impressed with people who plan a little bit, or make smart decisions, because I don’t see it very often. I see people living at or just above their means, struggling constantly to make ends meet. These same people are always saying how they are stressed out and that bills are swamping them and that life isn’t fair. What? If you want to put on the air of success to yourself and others, you’d better bring home the successful paychecks, as well.

Of course, we have the people who match the theme of today’s blog post who acquire a bunch of neat stuff and then lose their job. Now they have to basically sell the life they were used to, and are forced to live more simply. The Escalade goes back to the dealership in favor of the economy car they probably should have been driving in the first place. The house goes to a short sale and big money is lost, forcing them to move into the much more moderate house they should have been living in the whole time. The jet skis go, the Harley goes, the dirt bikes go.

Now, I’m not saying that you shouldn’t purchase cool and fun things and make the best of life, but I’m saying that as a member of middle-class America, you don’t need to drive a BMW and hit Starbucks three times a day. That is what we call a Yuppie. Do you want to know a secret? The folks who make real money see a Yuppie coming a mile away, and have zero respect for them. You aren’t fooling anyone in your 3-series BMW that looks like a Nissan Sentra with a different logo. The investor who drives a big, black 7-series Beemer isn’t even acknowledging you exist, so why play the game? You’ll only pay for it later when the unemployment monster knocks on your door.

I have designed my life so that if I were to lose every bit of income I receive, I could still float by for a year easy, maybe more, and even a slight, part-time income will get me out of a hole. I live below my means, and still manage to have a ton of fun. If the unemployment monster rears its ugly head at me, I’ll be ready.