However, I would like to focus for a moment on what you can learn about money from your lower-income friends and relatives. I do not mean your friends who make poor financial decisions, such as buying a car with a $900/month payment without steady employment or having ridiculously high credit card debt. Instead, I mean your friends who happen have lower income but know their financial limits and still live within their means.
Here are a few examples of things I have observed about my lower-income friends, perhaps lessons all of us can learn:
- It is okay to have a paid-off older car that runs just fine; a shiny new car is a luxury often beyond reach.
- A glass of wine or a cup of coffee at home is just as good as, even better than, an expensive outing around town.
- An affordable pay-as-you-go phone/internet plan is just as good as an expensive mobile/iPhone service contract.
- Living together with extended family can create financial stability compared to rugged individualism and living in your own house/apartment.
- A lower-paying job, while creating some financial stress, can free up your mind and your off-hours for quality time with family and friends.
- There are plenty of ways to get good entertainment besides an expensive Comcast or AT&T cable package: think Netflix, Hulu, and YouTube.
As I think about ways to downsize and to reduce my expenses, oddly enough I look to my lower-income friends as role models for frugality and living within one's means. Of course, making more money is perhaps the easiest way to create some financial stability. But making more money shouldn't be an excuse to be wasteful or frivolous with those hard-earned dollars.