Although 2025 is just getting started, I’ve already read a plethora of personal finance articles from various experts and self-made suburban millionaires who have been espousing their top new year resolutions.
Of course, all of the usual suspects are dutifully mentioned:
Track your spending. Check.
Start a budget. Got it.
Stop trying to keep up with the Joneses. Yep.
Pay off the charge cards. Good.
Pay yourself first. Uh huh.
Yeah, yeah, yeah, blah, blah, blah.
Don’t get me wrong; those are all great resolutions.
However, those noble commitments will ultimately mean absolutely nothing — bupkis, goose egg, naught, nada, zero, zilch, zip, zippo, zot — if you fail to spend less than you earn this year.
Making an annual commitment to spend less than you earn is the mother of all resolutions and one that should be renewed each and every year by good folks like yourself who wish to achieve the ultimate nirvana of the common man: financial freedom.
There is a reason why “spend less than you earn” is the first of my ten commandments of personal finance.
As personal finance new year’s resolutions go, it’s the only one that really matters.
If you abandon or fail to make that most-basic of resolutions, you may as well relegate all of your other personal finance commitments to that large and lonely scrap heap of forgotten pledges and promises that’s currently sitting in your backyard …
Or wherever you keep that thing.
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Great advice that I definitely plan on applying to my life. I will also stay tuned for the rest of your sage advice.I must confess, still cracking up over the 8-ball predictions post that turned me on to your blog to begin with!! God bless.
Good for you! I just want to let you know, Marta, that I came up with the advice for this article all by myself. I got absolutely no help from my trusty old Magic 8-Ball. 😉
Well Said Len
Len, this is really the bottom line on personal finances. Thanks for boiling it down.
Len, that’s virtually an old fashioned concept (spend less than you earn) proving that if it’s new, it isn’t true, and if it’s true, it isn’t new.
It really is the foundation of all financial resolutions. Not always easy to manage though when life throws one of those blizzard expense phases your way, but definately worth long term use.
I like that! I need to figure out a way to somehow fit that “if its new, it isnt true, and if its true, it isnt new” saying into my dinner conversation this evening. That should throw the Honeybee for a loop. 😉
Nobody should ever beat themselves up for unexpected and uncontrolled expenses. Life happens to all of us. Although we can all try to minimize the adverse impacts of those blizzard expense phases by slowly and steadily building up our rainy-day funds over time.
You are so right. If we don’t get this one down we are spinning our wheels in the mud.
so right len!!!! and tell Nina we need another post from her!
Too right, Len but Dickens got there first:
David Copperfield’s Micawber Principle “Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”
(A British pound used to be 20 shillings, and a shilling was 12 pence. We call this ‘old money’ over here!).
Where’s the commandment, “Stop My Kids From Spending More Than I Earn?” Is that the “uncle” of all other resolutions? 😉
Fortunately, this hasn’t been a problem for me in the past. Although, there are some pretty expensive household expenses on the horizon (new roof, new upstairs heat pump) that I need to go ahead and start setting aside money for so hopefully I won’t have to go into the red this year when the time comes to start attacking those projects.
“…Scrap heap of forgotten pledges and promises thats currently sitting in your backyard
Or wherever you keep that thing.”
Mine’s at the gym, which is a place I need to see more of this year….
Too bad most of society can’t seem to understand this is so basic principle of financial freedom. Thankfully I can say that I always pay myself first. Thanks for the reminder.
Wait…I don’t get it.
Spend less than I make?
***BOOM! Mind blown…***
Sadly, BB, that little bit of common sense isn’t obvious to the majority of people out there.
When I was younger, I thought the squeeze between my income and desired expenditures would ease by simply increasing my income. After awhile, it occurred to me that chasing more income had a cost to it – too much attention to getting more money became an obsession, a paramount goal in life which caused me to neglect life’s experiences that can’t be bought with money.
So I backed off; Followed what to me is a more natural and satisfying way to live.
Then, I had enough money and a better life, besides.
Great advice, Dave.
When the Mrs. and I decided that large car payments had no place in our life or finances, it became so simple and easy to “spend less than you earn.”
Without a doubt, commandment #1.
That it is, Joe! Happy New Year!
Spend less than you make? Or in other words spend less than you take in?
What a concept.
Too bad Govt’s don’t use that simple little logic huh?
Then we wouldn’t be on the certain path to “sovereign debt” destruction and all that it will entail when it all goes Boom. 🙁
Well,
Keep your basics simple and clear is what i can hear out from this blog and well said in little words. But i would add y saying spending less than you earn needs to be coupled with where you spend this money as well.
Some folks spend less than what they earn but not in right channels, so nothing is left in their kitty for the future, so spend less – Yes, but spend it according to your life goals and allocate your spending!!!!
Excellent post and great comments. Isn’t every day a new year?
All the best you folks, and thanks Len.
Thanks, Paul. Happy New Year!