Are You Living Beyond Your Means? & Why?

Posted Wednesday, November 4th, 2009. Filed Under Financial Empowerment

Maritza shares an interesting point of view:

Are we living above our means? How often do we ask ourselves this very important question. From my point of view this is one of the main reasons our financial markets collapsed. We were buying debt without taking a closer look at our cash and asset “closet”. There is a psychological affect on consumer spending.

What is the core reason why we buy things? For me it’s to fill a void but to be honest that void does not get filled with things bought but from things you actually can’t buy, which is love and connection. I lived in the poor side of Dominican Republic, we did not have luxury items but we had love. I did not feel underprivileged nor lacking and I had everything I needed: food, nature, and best of all love and connection. Coming to the US I realized at a very young age how spoiled we are and how attached we are to material things. So if you are living above your means, ask yourself what is
the core reason why you are spending? Is it to fill a void in your heart, is it to keep up with the status of your peers, is it because having things around you make you feel safe? If you search within you will realize the reason you are living above your means is because you are trying to fill a gap, the gap of feeling loved.

A MESSAGE FROM ONE ADVISOR…
When the markets are up – stock and real estate, people look at their “paper” value and say, “Oh I can live at this level”. I’ll never forget reading an article about this where the advisor said that if you bought shares worth $50,000 and on paper they are worth $150,000 YOU NEED TO LIVE AT THE $50,000 value for the $150,000 value is inflated, will fluctuate and change and has not been realized yet. Meaning, that you have not cashed out. That comment has stayed with me ever since. We now know that the markets can swing just as easily the other way.

A Story about a Diamond Ring…
I know this woman who lived the high life. Her husband and her used to buy homes, refinish them and flip them. He was in the used car business. Well things in the market changed and now the house wasn’t so easily flipped. This couple decided to split (for other reasons) and they needed to sell the house. Now they were going to have to sell it for a loss or just break even. They did. She bought another house. The woman’s (ex)husband lost his business and they needed some cash. She decided to sell her diamond rind. It was nearly 4 karats. She “thought” it was worth one amount and when she went in to sell it back to the place she bought it they offered her a considerably low amount. The interesting thing about the diamond is the place she bought it sold her a ring described at one value – clarity, shape, etc. She took it to two other places and it turns out that the ring she “thought” she bought was not it and the value was much less.

What is the point? We cannot assume that when we buy something it will hold its value or even be it’s value of the price we paid. We do go by market value to give us some indication however you are best to live at your actual dollar budget for the month. See what is really coming in and what is going out and then you can make good decisions on where and how much you want to spend.

We both feel that abundance is a good thing – for the more you have, the more you can give. What we are pointing out is that “things” are what you have NOT WHO YOU ARE. Also be grateful for what you have no matter what level that is at. The US Thanksgiving is approaching — take the time to look around and see if you are happy with your decisions. You always have the choice to make changes. Even when all seems bleak, like your finances, it can always be turned around!

All of our love,

Sandra & Maritza




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