Updated 1/26/19
I'm a huge believer in household budgets, and in writing them to be very conservative. What I mean by that is that I am an unabashed, even passionate, advocate for living not just within our means, but well beneath our means whenever and however possible.
There are a number of reasons for my conviction about this, but here’s one simple and straightforward one that applies to every one of us who is not wealthy: you have absolutely no idea what life could throw your way, and it’s a very smart idea to be prepared.
One need only look at the people who faced the stress and financial uncertainty in the recent government shutdown to understand the value of saving for that proverbial rainy day. And it was not that long ago that people lost their homes in the recent Great Recession, which highlighted how the practice of taking on a mortgage smaller than the maximum we can afford on paper is actually a great idea. Socking away extra savings to ensure we have a safety net for hard times is an idea that never becomes outdated. Quite simply, living on less can provide great peace of mind.
But living simply on a budget and saving bring far more benefits than just providing a sense of security. Because, contrary to what many people think, budget living actually affords us the chance to spend when and where it matters to us, instead of frittering it away on things we don't need and won't remember. With nothing to show for it.
Saving and having some extra cash in the bank and in our investment accounts allow us to take advantage of unexpected opportunities that might come our way.
Here are some examples of what I'm talking about.
There are a number of reasons for my conviction about this, but here’s one simple and straightforward one that applies to every one of us who is not wealthy: you have absolutely no idea what life could throw your way, and it’s a very smart idea to be prepared.
One need only look at the people who faced the stress and financial uncertainty in the recent government shutdown to understand the value of saving for that proverbial rainy day. And it was not that long ago that people lost their homes in the recent Great Recession, which highlighted how the practice of taking on a mortgage smaller than the maximum we can afford on paper is actually a great idea. Socking away extra savings to ensure we have a safety net for hard times is an idea that never becomes outdated. Quite simply, living on less can provide great peace of mind.
But living simply on a budget and saving bring far more benefits than just providing a sense of security. Because, contrary to what many people think, budget living actually affords us the chance to spend when and where it matters to us, instead of frittering it away on things we don't need and won't remember. With nothing to show for it.
Saving and having some extra cash in the bank and in our investment accounts allow us to take advantage of unexpected opportunities that might come our way.
Here are some examples of what I'm talking about.
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