Limiting Choices by Living Beyond Your Means

By | 2016-12-19

Today was the most excited I have been at work in a long time. It wasn’t because of a raise, free lunch or even a surprise during “office hours” Happy Hour (yes, we sometimes get beer during work hours). During an 8.5 hour offsite team event the head of HR broke me out of a trance with a surprisingly spot on personal finance lesson about living beyond your means.

It started with a section of his powerpoint called “unsolicited career advice.” He talked about ways to get promoted and how important it is to get experience in multiple areas. Blah, blah blah, generally I agreed with everything he said but it seemed like boiler plate HR talk.

Then he completely switched it up and threw up a slide that said “Live below your means” and launched into the below story:

I was meeting with a younger sales associate that was doing an exceptionally well job and earning a great salary for someone his age. Although he was making good money, he was not loving sales and was interested in another opening we had at the company. Everything seemed to be going great until we hit the salary for the new position.

Immediately after hearing it, he looked up at me and said “I can’t afford to live on this.” 

The following week, I watched the same 25 year old get into a brand new BMW (while I was driving my Hyundai Elantra). At that point it clicked that living beyond your means can take choices away from you. 

If you have to earn $95,000 so you can spend $96,000, you need to re-evaluate your spending habits. Don’t let money be the reason you can’t do something you want to do. 

Living Beyond your Means

Don’t Limit Choices by Living Beyond your means

A 25 year old made the decision to keep doing something he did not enjoy because his lifestyle was to expensive to switch into a lower paying job. The kicker, he was most likely looking at a short term setback in pay.

The bulk of my focus has been on giving myself the choice of early retirement. But controlling spending and living below your means opens up so many more choices. Maybe you or you significant other wants to take on a lower paying passion job. Or one of you wants to take a full time break to raise children.

These conversations probably don’t even happen if you are spending everything you earn and then some. Once the bills start piling up, the focus is “How are we going to pay this” instead of “How do I want to spend my time?”

Did the message sink in?

I took a few looks around and saw most of the people on their laptops or cell phones. A few of my peers that don’t know about my background were cracking jokes about not being able to live on their current salaries because they were to low. Part of me feels like they were simply making jokes to justify their current habits. I know each and everyone of them makes a livable salary and then some.

The message did sink in with me, even though we already live well below our means. Thinking further about the amount of choices we have today made me feel good. If an opportunity comes up or one of us feel strongly about switching it up, we can make it work.

I thought it took some guts to deliver that kind of message in front of 200+ people. Even telling friends they are bad with money is difficult, but he took it to a new level.

Living Beyond Your Means – Take Away

99% of the time your employer does not have any business telling you hot to spend your money. But in this instance the message was spot on. I am glad he put it out there and hopefully at least 1 person listened. The longer you outspend your income, the deeper hole you will be in.

You don’t know what opportunities are coming your way, make sure you are ready and can Take Action if interested. Freedom is a powerful motivator, but being able to choose how you earn money is powerful as well.

Are you limiting your choices by Living Beyond Your Means?

25 thoughts on “Limiting Choices by Living Beyond Your Means

  1. Matt @ Optimize Your Life

    I am with you 100%. And it’s good to see some employers getting the message.

    I started down the FIRE path through seeing the promise of early retirement, but I quickly decided that the best part was actually opening up more options. Living well below my means allows me to take a lower paying job, to stand up to bosses without fear of losing my job, to have more control over designing the life that I want. It’s not something that I originally considered, but it is a really amazing side effect.

    Reply
    1. Apathy Ends Post author

      Still pretty surprised that message got delivered – but I sure do like it

      The amount of choices it opens up is staggering! The fear of losing job is a big one

      Thanks for the comment Matt

      Reply
  2. Amanda @ centsiblyrich

    I think it’s fantastic he provided such a great example! It’s frustrating that most were not actually listening to his great advice.

    Spending below our means has given us options. It allowed me to be a stay at home parent. Also, my husband has been able to decline two management positions, which could have resulted in career suicide but, thankfully, did not. Those positions would have resulted in travel and many more hours of work each week. Many would consider that a dumb move, but we decided a long time ago to value time over money.

    Reply
    1. Apathy Ends Post author

      Yea, not surprised people weren’t paying attention unfortunately. That happens when HR gets in front of a crowd sometimes.

      You have some great examples of how I envision it working for our family down the road – management used to be a goal of mine, but have completely 180 away from that thought. Sounds awful to me.

      Appreciate the comment!

      Reply
  3. Gary @ Super Saving Tips

    It’s good to see this kind of topic addressed in a corporate/HR setting, but such a shame that more people didn’t take notice. Living below your means definitely opens up your options, more than just FIRE. For me it meant more freedom in my career, giving me the ability to go out on my own, and to do consulting work where I didn’t have to be in that corporate environment anymore. I can imagine lots of other opportunities where living below your means would give you more choices, and if nothing else, at least it gives you more security.

    Reply
    1. Apathy Ends Post author

      Going out on your own is an awesome opportunity and something I want to pursue eventually. Definetely not loving the corporate world.

      And yes – security is an immediate benefit of living below your means.

      Thanks for the comment Gary

      Reply
  4. [email protected]

    What a great example, and kudos to HR for telling the story. It’s so true that living beyond your means takes away your choices, while living within your means-or financial independence-gives you choices. That young person in the BMW doing a job they don’t enjoy will one day turn into the mid-40 year old with the big house, fancy cars, and consumer debt doing a job they don’t enjoy. The company can also decide that they no longer need your services and lay you off – and instead of waiting for an ideal job, that person will need to take the first thing that comes along, even if it’s terrible. The sad thing is that they’ll likely think that this is something they “have to” do, rather than a consequence of years of making the choice to live beyond their means.

    Reply
    1. Apathy Ends Post author

      Exactly! Like Gary mentioned above, the security alone is worth it in my opinion – you worry less about a lay off, and know you can take on a lower paying job and still function.

      That consequence escapes a lot of people – it seems so simple…..

      Reply
  5. Mrs. Picky Pincher

    This is pretty funny, because I keep seeing people fall for this trap. Hell, Mr. Picky Pincher and I were in the same place in 2015. We had too much debt, spent too much money, and had zero savings to show for it. We were trapped and stuck with limited options–other than a complete lifestyle overhaul, which is what we did.

    However, we currently have a savings rate of 50%, which enables us to pay off debt like crazy. This last year we tackled $25,000 in credit card debt, paid for a $12,000 renovation in cash, and are now paying off $65,000 of debt in 18 months.

    There’s something to be said for being the “weird” frugal person. 🙂

    Reply
    1. Apathy Ends Post author

      Holy debt domination!

      That is impressive and glad you turned it around. Its funny that what you were doing is the norm and what you are doing now is crazy by most standards.

      Reply
  6. F
    Full Time Finance

    Very cool of your hr to put the message out there. It’s too bad people did not seem to listen. That being said it’s not surprising as admitting you need to change is really the hardest step in the whole thing. I only wish they’d put this out there for college kids and others, before they get stuck in their ways and need to change. It’s easier to start that way then break a habit.

    Reply
    1. Apathy Ends Post author

      Definetely the hardest step. Followed closely by actually taking action and making the changes you know you should.

      It should be a required lesson in every classroom. High School and College

      Reply
  7. Matt @ The Resume Gap

    I love this example! I’ve seen it too many times: colleagues feeling like they want or need to make a change (often to less stressful and more meaningful but lower-paying work) but who are trapped by their high incomes. Living economically isn’t just about quitting work forever. It’s about options!

    Reply
    1. Apathy Ends Post author

      Its a great lesson, and while quitting forever is great options like this can bridge the gap between now and that magical day.

      Reply
  8. Andrew @ Dollar After Dollar

    I wish more HR departments would at least acknowledge this with their employees. Heck, I wish they would give the same example in high schools and college!

    It’s a great way to think about spending. The more you consume, the tighter the chokehold is on your freedom. Consumption beyond your means makes it that much harder to do what you love, while spending time with the ones you love.

    Cheers!

    Andrew

    Reply
    1. Apathy Ends Post author

      Thanks for the comment Andrew

      Definetely need to push this message out and make it the norm as the opposite is today.

      Reply
  9. Mr. RIP

    Totally agree with the equation “smart = giving yourself more options”
    I recommend you to watch a nice TED talk named “An equation for intelligence” by Alex Wissner-Gross 🙂

    Reply
    1. Apathy Ends Post author

      Will definetely check it out – thanks for the tip.

      Reply
  10. Mr. Groovy

    Let’s see…stay in a job a hate so I can drive a beamer or move to a job I’ll probably love but pays less? The choice is so crystal clear today. But when I was 25, I probably would have went with the beamer. Sigh. Thanks for sharing this kernel of wisdom, AE. And Merry Christmas, my friend.

    Reply
    1. Apathy Ends Post author

      Thanks Mr Groovy – thanks for the comment

      Thankfully I never went down the crazy expensive car path, but did go to Happy Hour and Lunch 3-4 times per week for awhile. Cant believe how much $ I wasted doing crap that didn’t create any memories.

      Reply
  11. Laurie @thefrugalfarmer

    I love that your employer had the guts to give this message at work. It has to be said, and most people still seem to be afraid to broach the subject. We were that 25-year-old guy for years, always thinking that a boost in income would make our money situation more bearable. It truly never occurred to us that WE were at the root of our massive debt and paycheck-to-paycheck living. We were both raised that some people were born to be rich, and others to be poor, and that individuals had no control over the situation. When we finally found PF blogs and learned differently, it changed our lives. Great post!

    Reply
  12. Rajkumar

    Hi Mate,

    Yeah, I agree with you one somethings. I’m more like a man who wants to live the life the way I want, and I exactly did that. I left my high paying job then started my small company (No body liked my idea of leaving a high paying job to start a small firm). I opened more options for myself as I always have to fear my boss or get fired. I’m a happy man as of now I’m making ten times more than my job has offered me.
    Thank you for sharing valuable information.

    Reply
  13. [email protected]

    The longer you outspend your income, the deeper hole you will be in. i’m very much impressed with your last line. Seriously it’s a wonderful advice that one can ever get, as usual many people don’t listen to free advice but this is something which everyone should listen to. Also thanks for the easy to understand (lol) example, such notices are being ignored nowadays everywhere, it’s sad to see that people have no respect or care towards other’s choice/notice/decision.

    Reply
  14. Ty

    I love this.

    I’ve been in a spot where I couldn’t afford to leave a job I HATED simply because it paid well and I’d grown accustomed to the $$$. What a stupid, self inflicted wound that was.

    Good job to your HR person!

    Reply
  15. J
    Jillena

    It takes Everything in me not to take staff aside and ask them Why they haven’t set up a 401K yet! I talk to all of them about what is available and really encourage them to step it up, but some of them didn’t even sign up for a pension when they were first here. It’s a struggle to get people to listen to even the basics. I am so glad you posted this, I can see know they need an illustration!

    Reply

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