Why You Should Spend Less Than You Earn

spend less

One of the most important principles to becoming wealthy is to spend less than you earn. This sounds easy enough, but in practice it can be hard to do. This article looks at the challenges to spending less than you earn and offers some tips to overcome these.

First I want to look at those who spend more than they earn. It stands to reason that if someone is spending more than what they earn they are either being given money or are borrowing it. In this age of worldwide economic growth and prosperity it has never been easier to borrow money. Temptation to borrow is everywhere, whether is be for a new TV, a new car or a new house. In Australia personal debt levels are at record highs. I also read that the US Federal Reserve calculated that more than 40% of US families spend more than they earn.