8/11/2011

Mirrored Rules Of Personal Finance

While Jordan and I are honeymooning in Vegas, I've asked a few of my favorite bloggers to help me out by writing a few guests posts. This is a guest post by Rafiki. He is a 20-something blogger from the island of Barbados.  He writes on personal development and finance at Upendlife.

When I first began my personal finance journey I learnt a rule which would go on to become my golden personal finance rule. That rule is 

SPEND LESS THAN YOU EARN
Since learning this rule I've made it a good part of my life's worth to do this. I have automatic transfers set up to savings & retirement and I usually don't do much in terms of spending money frivolously.

Recently though I came across a twist to this rule, an exact mirror image is the best way to describe it and just like a reflection, it is facing the opposite direction but completely duplicates your actions.

This mirrored rule is

EARN MORE THAN YOU SPEND
Now this rule caught me off guard and I took some time to consider it. If you really want more and you don't want to accumulate debt to do so, your best option to do that is earn more money. When you think about it, they are plenty of ways you can earn more, be it side hustles, overtime, selling stuff or even investing.

The difference in these rules, to me at least, comes down to this,

One is a minimalist, content and patient lifestyle while the other is an over achiever, always active impatient lifestyle.

To me, the most valuable thing on earth is time and how you utilize it is up to your preference. I'm the kind of person who after finishing my 40 hour week I just want to relax and do things I love. Things like reading, playing games, spending time cuddling with the love of my life while watching the tele and treating her us to an outing every once in while. So for me the earn more than you spend option isn't best suited for me.

The earn more than you spend type is the type of person who would set a goal, for example, to buy a new bicycle. They are the kind of people who would go to work in the morning, come home and walk a few of the neighbor’s dogs for a fee and then jet off to do some late night work like waitressing or bartending. This works for them but a lot of the times they operate on less sleep or they sacrifice some other thing like tele watching or something less important to them.

Earn more than you spend is the go getter lifestyle. They are always doing something to further/better themselves or earn something. When they achieve whatever it is they want, they may bask for a while in the glory of success but then they are “on to the next one”.

Nothing is wrong with either lifestyle as both still need to save some of what they earn and consider the future. They both need an emergency fund, some retirement savings, some form of goals and they both need to do whatever makes them happy without accumulating unmanageable debt.

An interesting tidbit is that the lifestyles can interchange. Sometimes the spend less than you earn person may switch up and start working more, most likely to achieve a short term goal faster. They may pick up some overtime or start doing some odd jobs. Other times the earn more than you spend person may reach a burnout and just want to relax and take a break, maybe go on a vacation just to recharge and they switch up their lifestyles as well.

Both are great rules to live your life by. It doesn’t matter which you are. You just have to know yourself and what you want and be true to yourself. Any of these lifestyles are better than the alternative credit life.

Do you know which you are?

To Jessie & Jordan

I wish you the best for the future. May your lives, when joined together be one of the greatest blessings to this earth. Separate as you are now you have done and achieved so much. The world itself can hardly wait till your hearts beat as one. We all could use more touches of love in our lives and in this world. Spread as much joy and love as you possibly can for the rest of your lives and love and cherish each other forever. Congratulations in advance and I hope the wedding day is one of the most memoriable events in your life. May you live happily ever after.

Your friend and fan
Rafiki from Upendilife

P.S.
Thank you for sharing your journey with all of us.
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