The Perils of Living above One’s Means

I recently read a story on CNN's website about a woman who had a job making a $70,000 a year, got laid off in February, and was having to go to the food bank in March. But where was her savings? She didn’t have any because, like many other Americans, she was living way above her means and therefore was unable put anything away for a rainy day. Like many others, she just assumed she would always have a job and never planned for the possibility of not having one. While she was working, she made the mistake of thinking that things would always be as they were and the skies in her world would always be blue. No consideration was ever given to the prospect of a coming storm.

Why in the world did she go out and get a $2500 a month mortgage on a $70,000 a year salary? That was almost half of her gross monthly income and likely more than half of her monthly take-home pay. Do the math. Why did her bank or mortgage company even approve such a loan?  No doubt she was probably having trouble making that payment even while she was working. I'm sorry, but she helped bring this situation on herself. She gets little sympathy from me.

People are so covetous for expensive houses, cars, and other things these days that they don't bother to think. (There's more than one reason why covetousness is one of the seven deadly sins). I make more than $70,000 a year, yet I have limited myself to a mortgage payment of less than $700 a month. Therefore, I have no trouble making that payment and have plenty of money left to put in the bank each month. That's called living below one's means and more people ought to have enough common sense to do it. In fact, I have been able to save so much that, if I were to be laid off, I could live comfortably off my savings for more than 5 years and would have no trouble making my mortgage payment during that time. Some people, though, seem to always have to learn things the hard way.