Life lessons

Living beyond your means

Last weekend I watched ‘The Company Men‘ on DVD. It’s a movie about the global financial crisis (GFC) and the aftermath focusing on a particular organisation. It was an okay movie but I couldn’t feel any empathy for the main characters. And that’s where this post is headed. Basically, the main characters work for this big corporate organisation and they are obviously rich and living in mega-mansions and then they are laid-off thanks to the GFC. And it is hard because they then fail to pay bills to their country clubs and the mortgage for their mega-mansion or their Porsche.

I know there was the theory that it was the recession that made Americans in particular realise they were living beyond their means and stretching their credit to the limit. I don’t think that it’s a far-fetched theory. And doesn’t just apply to America but most of the world I would think.

Even today, right here, everyone wants to own a house. Not an apartment. But a 3 or 4 or 5 bedroom house with a backyard. Can they afford it? Well, the banks are always willing to own you so yes, they will give you a loan for about 500,000 to a million. So while you may not be able to afford it, you might still go ahead and take the loan. Then you have the cars. If you are image-conscious, a Holden Barina or Toyota Yaris are not the answer. No. You need a BMW or a Merc or a Peugot. And of course, every family needs a monstrosity of a 4WD to fit the kids in. Once again, the image-conscious need to be seen at the most trendy restaurants and bars. You can’t just go to the cheap Indian take-away. You have to go to a place where the food costs at least $20. And the wine you drink has to be expensive. The clothes you wear have to be a designer brand. Jag, Portmans, Gucci, Jacqui E, Marc anthony. You wouldn’t be caught dead in Target. And finally, the holidays. Because work is so stressful, you just have to go overseas for holidays. Australia is not good enough. It has to be Bali or Fiji or Hawaii or Europe.

I have never understood the need for living up to an image. When I was younger, I remember my uncle owning these big cars while my parents on the other hand have always had a small one. When I asked my uncle the need for such a car his answer was along the lines of how it was important to have a certain image when you went to the equivalent of a country club and had the valet park your car. I love my uncle. But I completely disagreed with him. And I still do.

I’ve never had a valet park my car. Maybe because I’ve never gone to a place that has a valet. I don’t buy designer clothes. Mine are from Target when on sale. Or from other stores when on sale. Expensive foods are out. I live in an apartment and I’m perfectly content to bring up my kids in one in the future. My car is a used car — a 2001 model. As for holidays, I go somewhere not so expensive when I can afford it. I do not earn that much so I don’t understand the need to live beyond my means. I prefer saving.

I am no saint. I do have a credit card and I am guilty of the occasional impulse buy on it. But you won’t see my buying stuff to have an image of success or an image of being rich. I am not rich. So why should I try and be something I’m not? That doesn’t mean I dress like a slob or anything. I know I will need a home loan to buy a house but that doesn’t mean I am going to buy a mansion. Because put simply, I can’t afford one. I could afford to pay off an apartment though.

What is it that makes us live beyond our means? Is it just narcissism? The need to want to look better than others or keep up with the Joneses. Or do we think we deserve to have it all because we work hard? I understand with the ease of having things like credit cards and interest free periods to purchase goods and have loans, we are able to succumb to any of the above a lot more easily but what makes some of us more prone to it than others?

In the movie, after Ben Affleck’s character loses his job, he still wants to keep his successful image and continue playing golf at the country club and dress in desginer clothes and keep his Prosche. But he is unwilling to take the only job available in tough economic times which offers him half his pervious salary.

And the thing is, there are probably people like that. Who think they deserve better and deserve to be living a rich lifestyle.

Even when they can’t afford to.

Do you live beyond your means? If so, does it scare you? 

Do share your thoughts…

Until next time,

Cheers!!!

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  • Reply
    Jake
    September 1, 2011 at 12:03 pm

    It all has to do with the world we live in, its get more and more materialistic by the second where we are brining up children teaching them that the measure of success is wealth. You can’t turn around and say no, my kids are ethical and know theres more to life than money, its just NOT TRUE , the hard reality is the way people measure someone else’s success is through wealth. And human beings are auto-tuned to look up to someone and seek something better and when that better something equals a big house and flashy SUVs that gorge more fuel is it any wonder why people don’t think of living within their means ? .

    I keep arguing with my sis about this when we have heated debates about socialism vs capitalism and I still believe we are heading towards a brick wall. Its happened before ,  there was a time when the river Thames was so polluted that people started dying of cholera, and there was not other option other than cleaning it up. The streets of new york were so dirty once that there was sewage pouring down the sidewalk and people realized they cant go own living like that and cleaned it up.

    Its not that hard to see, human beings wont act until the second when there is a threat their existence. Eventually we will strip out planet off its resources and then repent for our actions maybe then we will learn to swallow the pride and live with more humility

  • Reply
    Jake
    September 1, 2011 at 12:03 pm

    It all has to do with the world we live in, its get more and more materialistic by the second where we are brining up children teaching them that the measure of success is wealth. You can’t turn around and say no, my kids are ethical and know theres more to life than money, its just NOT TRUE , the hard reality is the way people measure someone else’s success is through wealth. And human beings are auto-tuned to look up to someone and seek something better and when that better something equals a big house and flashy SUVs that gorge more fuel is it any wonder why people don’t think of living within their means ? .

    I keep arguing with my sis about this when we have heated debates about socialism vs capitalism and I still believe we are heading towards a brick wall. Its happened before ,  there was a time when the river Thames was so polluted that people started dying of cholera, and there was not other option other than cleaning it up. The streets of new york were so dirty once that there was sewage pouring down the sidewalk and people realized they cant go own living like that and cleaned it up.

    Its not that hard to see, human beings wont act until the second when there is a threat their existence. Eventually we will strip out planet off its resources and then repent for our actions maybe then we will learn to swallow the pride and live with more humility

  • Reply
    Richa
    September 1, 2011 at 12:54 pm

    I so agree! People are out of control here. They have so many credit cards and so much debt on it. The only part where they get my sympathy is the student loan. Each and every American who has gone to college starts with one. What I don’t get is how and why they have to have big, nice cars, branded clothes or such things when they already have a debt? If I ever had a debt, my first priority will be to pay it off before I could indulge in anything. I guess that’s Indian middle class mentality. We are wired that way. Savings good, debt bad. 

    Although I would love to own a big house. I have always wanted one. Its lucky that way that I ended up in Houston because its not as far-fetched dream to own a house there. They are affordable. I would need to save for few years though before I could realize that dream..but someday, I will own a house.

  • Reply
    Richa
    September 1, 2011 at 12:54 pm

    I so agree! People are out of control here. They have so many credit cards and so much debt on it. The only part where they get my sympathy is the student loan. Each and every American who has gone to college starts with one. What I don’t get is how and why they have to have big, nice cars, branded clothes or such things when they already have a debt? If I ever had a debt, my first priority will be to pay it off before I could indulge in anything. I guess that’s Indian middle class mentality. We are wired that way. Savings good, debt bad. 

    Although I would love to own a big house. I have always wanted one. Its lucky that way that I ended up in Houston because its not as far-fetched dream to own a house there. They are affordable. I would need to save for few years though before I could realize that dream..but someday, I will own a house.

  • Reply
    Indumathy Sukanya
    September 1, 2011 at 1:03 pm

    i share the same views!
    i dont see the logic behind designer clothes, shoes and purses…i cant afford it for one thing…even otherwise i dont see why i should go for something so expensive just for its brand value! i could get 5 normal tees at the price of one branded one!

    I’m guessing such people try hard live up to such images they’ve created for themselves in the society…they must be real insecure people deep down!

  • Reply
    Indumathy Sukanya
    September 1, 2011 at 1:03 pm

    i share the same views!
    i dont see the logic behind designer clothes, shoes and purses…i cant afford it for one thing…even otherwise i dont see why i should go for something so expensive just for its brand value! i could get 5 normal tees at the price of one branded one!

    I’m guessing such people try hard live up to such images they’ve created for themselves in the society…they must be real insecure people deep down!

  • Reply
    Titaxy
    September 1, 2011 at 2:13 pm

    Ditto for every word you’ve said here. I feel the same way.

    When I see people living beyond their means just so they can wear designer clothing or drive a luxury car, I don’t understand what goes on in their mind..or in my mind, for that matter. Why am I not able to live like that? Why do I cringe even at the thought of having to spend more than a set limit on clothing or anything else that I need? Why can’t I go on to live like today is my last day and spend all that I have without worrying about saving for tomorrow? Or just get loan after loan without thinking about how I would pay it back?

  • Reply
    Titaxy
    September 1, 2011 at 2:13 pm

    Ditto for every word you’ve said here. I feel the same way.

    When I see people living beyond their means just so they can wear designer clothing or drive a luxury car, I don’t understand what goes on in their mind..or in my mind, for that matter. Why am I not able to live like that? Why do I cringe even at the thought of having to spend more than a set limit on clothing or anything else that I need? Why can’t I go on to live like today is my last day and spend all that I have without worrying about saving for tomorrow? Or just get loan after loan without thinking about how I would pay it back?

  • Reply
    Aathira Nair
    September 1, 2011 at 5:21 pm

    Think I am gonna watch this movie… In the process of thinking of buying a house… and, I wanna get a duplex… don’t know whether to go with it or not… lets see…

    Regarding credit and the image… I so do not like that at all. I buy and use what pleases me. I think you carry it off… no one will question whether its x dollars of 2x, or 3x dollars. What say ?

  • Reply
    Aathira Nair
    September 1, 2011 at 5:21 pm

    Think I am gonna watch this movie… In the process of thinking of buying a house… and, I wanna get a duplex… don’t know whether to go with it or not… lets see…

    Regarding credit and the image… I so do not like that at all. I buy and use what pleases me. I think you carry it off… no one will question whether its x dollars of 2x, or 3x dollars. What say ?

  • Reply
    Psych Babbler
    September 2, 2011 at 6:37 am

    I agree Jake…the world we are living in is way more materialistic than it has ever been. Possessions define a person rather than the person themselves. And you’re right about the comparisons too…I think people make judgements about me because I live in an apartment rather than a house [shock, horror!] and that I drive a used car and all the other stuff I mentioned. Does it mean I’m unsuccessful? I don’t know. I know I love my job and that’s all that matters. True, I’d earn way more working in the corporate world but I’d probably have sold my soul by now! And I agree that human beings don’t act until the last second…only time will tell whether they can be effective then!

  • Reply
    Psych Babbler
    September 2, 2011 at 6:37 am

    I agree Jake…the world we are living in is way more materialistic than it has ever been. Possessions define a person rather than the person themselves. And you’re right about the comparisons too…I think people make judgements about me because I live in an apartment rather than a house [shock, horror!] and that I drive a used car and all the other stuff I mentioned. Does it mean I’m unsuccessful? I don’t know. I know I love my job and that’s all that matters. True, I’d earn way more working in the corporate world but I’d probably have sold my soul by now! And I agree that human beings don’t act until the last second…only time will tell whether they can be effective then!

  • Reply
    Prateek Gupta
    September 2, 2011 at 6:41 am

    Very true… Was nodding my head along throughout your post….Even I do not stretch beyond my means…. But my method is a bit different… I generally reduce the quantity won’t let go the quality (So if possible I would take 1 vacation in two years but that would be top of line) 

  • Reply
    Prateek Gupta
    September 2, 2011 at 6:41 am

    Very true… Was nodding my head along throughout your post….Even I do not stretch beyond my means…. But my method is a bit different… I generally reduce the quantity won’t let go the quality (So if possible I would take 1 vacation in two years but that would be top of line) 

  • Reply
    Psych Babbler
    September 2, 2011 at 6:47 am

    Richa, while America may be leading in terms of living beyond means, I don’t think others are far behind. I can understand student loans and home loans (because it seems nowadays owning a home outright is not possible). But with the latter, I still think people should take only the amount they know they can pay back. And yes, debt is bad is probably what some of us were trained with. Not so with kids nowadays. They see their parents sswipe a card and get everything…they probably don’t realise the money has to come from somewhere. I do hope you get your dream house…best wishes with it! 🙂

  • Reply
    Psych Babbler
    September 2, 2011 at 6:47 am

    Richa, while America may be leading in terms of living beyond means, I don’t think others are far behind. I can understand student loans and home loans (because it seems nowadays owning a home outright is not possible). But with the latter, I still think people should take only the amount they know they can pay back. And yes, debt is bad is probably what some of us were trained with. Not so with kids nowadays. They see their parents sswipe a card and get everything…they probably don’t realise the money has to come from somewhere. I do hope you get your dream house…best wishes with it! 🙂

  • Reply
    Psych Babbler
    September 2, 2011 at 6:54 am

    Welcome here Indumathy! I agree with you on the whole brand name thing too…even if I could afford it, I wouldn’t get it. I’d rather spend the money on holidays if I were rich! 😛 And I also agree with people being insecure and needing to live up to society’s image-consciousness.

  • Reply
    Psych Babbler
    September 2, 2011 at 6:54 am

    Welcome here Indumathy! I agree with you on the whole brand name thing too…even if I could afford it, I wouldn’t get it. I’d rather spend the money on holidays if I were rich! 😛 And I also agree with people being insecure and needing to live up to society’s image-consciousness.

  • Reply
    Psych Babbler
    September 2, 2011 at 7:20 am

    I knew you’d feel the same T…I think you and I are way too responsible. Hence we don’t live like today is our last day and don’t take loan after loan and we have been trained to think about saving for a rainy day. But I don’t have a problem with that. As you said, we have set limits to spend…so it’s not like we don’t spend at all. But it’s about spending wisely adn within our means.

  • Reply
    Psych Babbler
    September 2, 2011 at 7:20 am

    I knew you’d feel the same T…I think you and I are way too responsible. Hence we don’t live like today is our last day and don’t take loan after loan and we have been trained to think about saving for a rainy day. But I don’t have a problem with that. As you said, we have set limits to spend…so it’s not like we don’t spend at all. But it’s about spending wisely adn within our means.

  • Reply
    Lifesorchestra
    September 2, 2011 at 7:49 am

    Totally agree to all the arguments given above. I am called a miser myself among people I know because I tend to save (for a house one day) and not spend more. But sometimes I feel that it is also a matter of perspective. It can also be a different way of life. We feel uncomfortable to see some people buying top branded clothes because maybe we don’t have as much money as them to spare. From a person with less money than us might also feel looking at us that some of our expenses are insane. So who draws that line ? How to decide what is ethical and what is unethical spending ? Of course using a credit card to buy a 100 euro shirt might be definitely crazy when one does not have 10 euros in savings. But otherwise I personally don’t know anyone who buys clothes on credit. To buy a bigger thing like a house is another thing.   

  • Reply
    Lifesorchestra
    September 2, 2011 at 7:49 am

    Totally agree to all the arguments given above. I am called a miser myself among people I know because I tend to save (for a house one day) and not spend more. But sometimes I feel that it is also a matter of perspective. It can also be a different way of life. We feel uncomfortable to see some people buying top branded clothes because maybe we don’t have as much money as them to spare. From a person with less money than us might also feel looking at us that some of our expenses are insane. So who draws that line ? How to decide what is ethical and what is unethical spending ? Of course using a credit card to buy a 100 euro shirt might be definitely crazy when one does not have 10 euros in savings. But otherwise I personally don’t know anyone who buys clothes on credit. To buy a bigger thing like a house is another thing.   

  • Reply
    Karan Agrawal
    September 2, 2011 at 2:08 pm

    I for sure try to stay within my limits… Dreaming big is good… but you should try to live in reality. If you spend of stuff you dont need, you would have to sell stuff you need!

  • Reply
    Karan Agrawal
    September 2, 2011 at 2:08 pm

    I for sure try to stay within my limits… Dreaming big is good… but you should try to live in reality. If you spend of stuff you dont need, you would have to sell stuff you need!

  • Reply
    Vishnu
    September 2, 2011 at 2:36 pm

    People are at partially at fault – self-image and ego and peer pressure has a lot to do with impulse buying. But marketers and businesses spend billions each year trying to  create needs in consumers and figuring out how to sell things that they don’t need to them.

  • Reply
    Vishnu
    September 2, 2011 at 2:36 pm

    People are at partially at fault – self-image and ego and peer pressure has a lot to do with impulse buying. But marketers and businesses spend billions each year trying to  create needs in consumers and figuring out how to sell things that they don’t need to them.

  • Reply
    Chandana
    September 2, 2011 at 3:38 pm

    You strike bull’s eye with this post! People get so caught up in wanting and acquiring things that they dont ‘really’ need.. It starts small, and then the greed and the inexplicable urge to have more kicks in.. 
    I completely agree that when you work hard for something, you deserve something good, you deserve a few luxuries… but that is all relative. For some owning one small car maybe a luxury.. for others it may be a mansion with a BMW and a pool.. So its tough to say what exactly causes people to blow their money on such ‘unnecessary luxuries’. Could be their upbringing or just lack of common sense! 

    Anyway.. it was an excellent post. Very thoughtful and very debatable!
    First time at your blog… Following you 🙂

  • Reply
    Chandana
    September 2, 2011 at 3:38 pm

    You strike bull’s eye with this post! People get so caught up in wanting and acquiring things that they dont ‘really’ need.. It starts small, and then the greed and the inexplicable urge to have more kicks in.. 
    I completely agree that when you work hard for something, you deserve something good, you deserve a few luxuries… but that is all relative. For some owning one small car maybe a luxury.. for others it may be a mansion with a BMW and a pool.. So its tough to say what exactly causes people to blow their money on such ‘unnecessary luxuries’. Could be their upbringing or just lack of common sense! 

    Anyway.. it was an excellent post. Very thoughtful and very debatable!
    First time at your blog… Following you 🙂

  • Reply
    Psych Babbler
    September 2, 2011 at 9:41 pm

    It was an interesting movie Aathira…didn’t love it but at least gave you a perspective of the wrong things people do in terms of finances! Good luck with the house buying…exciting times! 🙂 And yes, I agree it makes more sense to see what you can carry off than needing to wear brand names!

  • Reply
    Psych Babbler
    September 2, 2011 at 9:41 pm

    It was an interesting movie Aathira…didn’t love it but at least gave you a perspective of the wrong things people do in terms of finances! Good luck with the house buying…exciting times! 🙂 And yes, I agree it makes more sense to see what you can carry off than needing to wear brand names!

  • Reply
    Psych Babbler
    September 2, 2011 at 10:03 pm

    That’s an interesting take Prats…quantity versus quality. Haven’t really thought about that but in some ways, it does make sense. 🙂

  • Reply
    Psych Babbler
    September 2, 2011 at 10:03 pm

    That’s an interesting take Prats…quantity versus quality. Haven’t really thought about that but in some ways, it does make sense. 🙂

  • Reply
    Psych Babbler
    September 2, 2011 at 10:34 pm

    Lifesorchestra, I have no issues with people buying brand name clothes or expensive cars etc if they can afford it. Some people can. For instance, I have some friends that still live at home so they don’t have bills to pay like I do and all their earnings can go to their clothes, cars, and holidays. While that makes me envious, I don’t think they are living beyond their means. But I notice clients who are financially not well off, still buying an Xbox and a PS3 and an Ipad and laptops and desktops and a big 52 inch TV and wonder about that…because they put it all on credit. And yea, buying a house you kinda have to get into debt these days with house prices! But even that, you would think people would get a loan they can actually pay off rather than buy a mega mansion for the image when they may not actually be able to pay it off.

  • Reply
    Psych Babbler
    September 2, 2011 at 10:34 pm

    Lifesorchestra, I have no issues with people buying brand name clothes or expensive cars etc if they can afford it. Some people can. For instance, I have some friends that still live at home so they don’t have bills to pay like I do and all their earnings can go to their clothes, cars, and holidays. While that makes me envious, I don’t think they are living beyond their means. But I notice clients who are financially not well off, still buying an Xbox and a PS3 and an Ipad and laptops and desktops and a big 52 inch TV and wonder about that…because they put it all on credit. And yea, buying a house you kinda have to get into debt these days with house prices! But even that, you would think people would get a loan they can actually pay off rather than buy a mega mansion for the image when they may not actually be able to pay it off.

  • Reply
    Psych Babbler
    September 2, 2011 at 10:35 pm

    I like that quote Karan — “Dreaming big is good…but you should try to live in reality” I think that sums everything up! 🙂

  • Reply
    Psych Babbler
    September 2, 2011 at 10:35 pm

    I like that quote Karan — “Dreaming big is good…but you should try to live in reality” I think that sums everything up! 🙂

  • Reply
    Psych Babbler
    September 2, 2011 at 10:42 pm

    Welcome here Vishnu! I agree…while people are partially at fault with society becoming more narcissistic by the day, the big businesses and agencies need to take a whole lot more of the blame! For example, the L’Oreal tag line “Because you are worth it” only feeds into this mentality of people…they try to sell things to people by making them believe they need it when they don’t! I could get on a whole different rant on this….

  • Reply
    Psych Babbler
    September 2, 2011 at 10:42 pm

    Welcome here Vishnu! I agree…while people are partially at fault with society becoming more narcissistic by the day, the big businesses and agencies need to take a whole lot more of the blame! For example, the L’Oreal tag line “Because you are worth it” only feeds into this mentality of people…they try to sell things to people by making them believe they need it when they don’t! I could get on a whole different rant on this….

  • Reply
    Psych Babbler
    September 2, 2011 at 11:00 pm

    Welcome here Chandana! It does start with the small stuff, doesn’t it? And then just goes on and on. And now, sadly, kids are trained to think you can get everything and you do need everything…an Ipod, a PS3, an Xbox…and yes, while I understand it is relative in terms of luxuries, some people don’t look if they can actually afford that luxury thanks to being able to swipe a credit card! 🙂

  • Reply
    Psych Babbler
    September 2, 2011 at 11:00 pm

    Welcome here Chandana! It does start with the small stuff, doesn’t it? And then just goes on and on. And now, sadly, kids are trained to think you can get everything and you do need everything…an Ipod, a PS3, an Xbox…and yes, while I understand it is relative in terms of luxuries, some people don’t look if they can actually afford that luxury thanks to being able to swipe a credit card! 🙂

  • Reply
    Jake
    September 3, 2011 at 5:33 pm

    HI Karan , just wanted to add.. dreaming big is ok . There is nothing wrong with dreaming big. But what is big = ?? that is what the problem is. If big = research in physics or medicine or computing for the better of the human race thats great .But when ben = a big house, designer wear, and sports cars, I just dont see the logic in it. People HAVE to start realizing that natural resources wont last for ever and our soci-economic systems are not perfect. The sooner each of us starts utilizing as little resources as we can, the better. 

  • Reply
    Jake
    September 3, 2011 at 5:33 pm

    HI Karan , just wanted to add.. dreaming big is ok . There is nothing wrong with dreaming big. But what is big = ?? that is what the problem is. If big = research in physics or medicine or computing for the better of the human race thats great .But when ben = a big house, designer wear, and sports cars, I just dont see the logic in it. People HAVE to start realizing that natural resources wont last for ever and our soci-economic systems are not perfect. The sooner each of us starts utilizing as little resources as we can, the better. 

  • Reply
    Jake
    September 3, 2011 at 5:37 pm

    Just wanted to add this quote from fight club that I love 
    “Things you own, end up owning you” – Tyler Durden

  • Reply
    Jake
    September 3, 2011 at 5:37 pm

    Just wanted to add this quote from fight club that I love 
    “Things you own, end up owning you” – Tyler Durden

  • Reply
    Priyanka Victor
    September 4, 2011 at 12:33 pm

    My grandpa used to wisely remark, ‘Money is the root of all evil’. Isn’t everything else, at least most of everything else, a manifestation of greed for money?

  • Reply
    Priyanka Victor
    September 4, 2011 at 12:33 pm

    My grandpa used to wisely remark, ‘Money is the root of all evil’. Isn’t everything else, at least most of everything else, a manifestation of greed for money?

  • Reply
    Psych Babbler
    September 4, 2011 at 8:46 pm

    I agree…in many ways it is the root of all evil…for instance, crime is more often than not due to greed for money.

  • Reply
    Psych Babbler
    September 4, 2011 at 8:46 pm

    I agree…in many ways it is the root of all evil…for instance, crime is more often than not due to greed for money.

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