In the content, Orman suggsted learning to live on half your income as a way to be financially prepared for the worst. If you lost your job or had your hours reduced you’d have no choice but to live on a limited income for a period of time. Therefore, being prepared for such a situation and ensuring you could get by. This helps to reduce your spending habits now before something does happen. Plus, saving half of your income is recommended for a comfortable retirement.
Regardless of how you may feel about Suze Orman, you must admit she brings up an interesting point: Could you live on half your income?
Can you live on half your income?
When I left my full-time job to pursue my own freelance business full-time, I promptly adjusted my spending and budget. It was not easy, but my first step was looking over my bank statements. I immediately decreased the amount of times I go out for coffee, researched the local grocery shops in my area for better rates and made sure to not purchase anything I did not need (like new clothes). Although my household expenses are shared with my boyfriend, his going to medical school meant we both had to make changes. So far, we’ve been able to quickly adapt and made it possible for ourselves.
The amount of dual income households have increased over the years, but a 2015 report from The Pew Charitable Trusts state that many individuals unfortunately still live beyond their means. In fact, much of the content of The Suze Orman show is letting people know if they can afford various items. But, people generally have a hard time wrapping their heads around this concept. It all seems unattainable and believe this is a concept meant for wealthier people. The truth is anyone can learn to live on less and save more. It really is just about reducing unnecessary expenses. Even if you feel you could not live on half your income, you could try living on 75% and saving and investing the rest. It will only work, though, once you begin to change your mindset.
Many times, we think we need every dime we make to live, but the harsh truth is that we there are several changes we can make in our spending habits. Often, wants are mistaken as needs, and we are unwilling to live in temporary discomfort in the present for a better future. By taking the time to truly evaluate all money in and out, we can see were adjustments can be made. It’s an activity that should be done regularly to make sure we are staying on track and to analyze our growth. Once you remove simple luxuries, such as cable subscriptions, dining out multiple times a week, and inefficient vehicles, you’ll see how this can positively affect your income. Trust me.
What are the benefits to live on half your income?
As you do make the expense cuts in your life, you can truly strive to live on only part of your earnings. If you do, benefits include:
- Getting in the habit of saving regularly
- Assures you can survive should an economic misfortune occur
- Shows you what your necessities in life are and which are pure convenience or indulgences
- Simplifies your life
- Makes you evaluate your lifestyle and reveals whether or not you are living outside of your means
Downgrading your lifestyle may be unappealing and daunting at first, but it is worth a shot to work toward improvement. Most likely, you’ll find that you won’t miss all those fun purchases because your finances will be stronger. The concept is difficult, but it is not impossible.
Don’t wait to be forced into downsizing; do it while you still have your regular income and revenue flow.
Do you live on half your income? How do you make it work for yourself?