Grow Up and Act Your Wage: Don't Go Broke Trying to Look Rich

In this social media era, we've all seen posts that claim that to stay rich, wealthy people drive raggedy cars and wear the same basic clothes. While this may be the case for some, personally, I don't think it's a requirement. I think it's more important to live within your means. Living within your means is a phrase that basically means spending less than what you bring home— not your salary, but your take-home pay. In the simplest terms, [this] is how you build wealth. I recognize it's much easier said than done, but I want you to challenge yourself.

Today, one of the biggest challenges to acting your wage is the "Fear Of Missing Out (FOMO)." FOMO is a real phenomenon that causes stress, anxiety, and even poor decision-making, all from the perception that others have rewarding experiences without you. Social media only exacerbates the problem because a live feed of events is at our fingertips. While generations before us like to call this a "millennial" issue, FOMO affects people of all ages and backgrounds. When it comes to money, FOMO can manifest itself in overspending on entertainment and material things for the sake of keeping up with others. Do you want to actually have money or just "look" like you have money? We have to find ways to resist the temptation.

Create a Budget and Track your expenses

As you can imagine, if you're trying to live within your means, you need a mechanism for when you can afford to say yes. One of the essential money management tools is the budget. A budget is an outline or framework for your income and expenses. A budget is not to keep you from spending money on things altogether, but it's designed to help you make decisions around spending and helps you control where your money goes. After you create a budget, I would recommend you track your expenses regularly. You can do this electronically, through an app, or good ole' pen and paper (whatever works for you). 

Remember just because you can, doesn't mean you should! 

Make a List of Your Wants and Needs

When you're creating your budget, part of the process is listing out all of your expenses. I would also encourage you to separate your wants and needs. Think past the basic needs like food, shelter, clothing, and water. What are the things you spend money on that you need to survive? For me, I would have a tough time surviving without the internet, a car, and my cell phone. What are the things you desire to have/do? I love working out...most days! My gym membership is at the top of my list. You'll also catch me with my AirPods in probably 80% of the day, so that's also at the top of my desire list. Once you have your list, try categorizing your wants and prioritizing them. Is there anything you can scale back on? Be honest. 

Before You Say Yes

Living within your means may mean that you need to start saying no to some things. I'm not suggesting that you deprive yourself of anything fun, but maybe you skip dinner with your friends or wear something you already own to the party. Trust me, no one remembers what you wore anyways. The approach depends on what's important to you. Also, be careful about comparing your situation to others. Studies show that only about 37% of Americans are prepared for a $500 emergency. This tells me that there are too many people living outside their means, using credit cards and other debt to supply their social media highlight reel. I would not recommend this, as this can lead to long-term effects to your financial health.

To prepare yourself to make decisions that will cost you money, create a framework. The structure applies to things you want since your needs are necessary for survival. The goal is to be more intentional about your purchases. Trust me; I want you to travel the world and have nice things, but I don't want you to go broke trying to do it! Here's the framework I use:

Is this something I actually want to do/buy?

If so, does it fit into my budget for the month?

Will I have to sacrifice/ forgo something to make up for this?

Will I still want this if I wait and see?

Can I find a promo code that works?

Now execute: What's one thing you can do to live further within your means? Take a look at your wants list (after you prioritize it) and try cutting out something toward the bottom of the list. For your next purchase, run through the spending framework and let me know how it works out. Remember, don't let FOMO manifest in your life!