Yet another celebrity is in financial trouble. You’ve seen the headlines telling us about that famous TV or movie star that can no longer afford to pay their rent or mortgage. What you don’t see in the headlines are those stories about the tens of thousands of other people, those not so famous, which can no longer afford to pay their bills. It’s a common occurrence, and mostly caused by spending more than you should.
I know, you gotta be saying “tell me something that I don’t know, Mr. Obvious.” Well, yes, we know it but don’t do anything about it. The famous people’s troubles vs. the normal person’s trouble is all a matter of scale. These famous people make a lot of money, and then they spend lot of money. By comparison, take your annual income and then add some zero’s to the end. Let’s assume that the number that you come up with is that of that famous person. Wow, that was a big number. Now add a similar amount of zeros to the end or your mortgage/rent, and then to your car, and then to your having fun fund, and so on. That number would be the famous persons spend. Basically, your income vs. spend is the same percentage as those famous people.
Ok, we did the math, now cut that income number in half, because you (or the famous person) are now retired. I’m only cutting the number in half for now because I’m sure that there is still some sort of income. I’m sure that you will still make some income, but not the income that you made when fully employed. But be careful of the spend. You may still have that hefty mortgage payment, car payment(s) and credit card bills.
By living within our means as our financial situation changes, we are better equipped to handle what comes next. Our biggest enemies are our laziness to not address what is happening around us, and our ego that makes us fear what others think. Don’t take either of these enemies lightly, they are real, and they will screw you over.
Short story time: I once had a huge hangup over a woman. It consumed me. A friend told me flat out, the world is full of women, move on and find a new one.
This is great advice. If your ego makes you worry too much about what people think, then find new people. As for the laziness; if you are around the right people you will just get it done.
There are many times in our lives that we make changes. We get a larger place to live when kids come along, and then and even larger place when more kids come along. When the kids leave we should adjust our life accordingly. It is so easy to adjust up, so why is it so difficult to adjust down? the adjusting down is where we fail.
Retirement encompasses many, many years of no working income. Many don’t minimize their lives early enough. We continue to spend during those years that we should be saving and we end up endangering our retirement life.
Be aware of where you are in life. Don’t over spend, and adjust your life accordingly. Don’t be afraid to adjust down.
I’d like to hear your thoughts. Please comment below as many others would also like to hear your thoughts