How to spend less than you earn

The best financial advice out there is to spend less than you earn. That takes self-control

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    A money changer shows some one-hundred U.S. dollar bills at an exchange booth in Tokyo in this file photo. Hamm argues that spending less than you earn is the best possible financial advice.

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Let’s just cut right to the chase here. It means being in control of yourself.

Every so often, a reporter will call me and ask me for my best financial advice and I always tell them “spend less than you earn.” It really does summarize the best way for someone to get their financial house in order. As long as you do that over and over again over a long period of time, you will be able to overcome any financial situation.

The challenge, of course, isn’t in following such a simple rule. Spending less than you earn is pretty clear.

The challenge is being able to exert that much control over your behavior. It’s being able to step up to the plate over and over again when it comes to not giving in to your impulsive wants. It’s being willing to do what it takes to improve your earnings before spending more money.

In short, it’s harder than that simple rule sounds.

The biggest difference between someone who is buried in credit card debt and someone who is debt free isn’t luck or income level. The biggest difference is self-control and the willingness to say no to most of one’s impulses.

I can tell you right now, from personal experience, that the single biggest change in my life in terms of finances over the past several years is simply gaining much more control over my impulse spending.

Six years ago, I thought nothing of stopping at a bookstore and dropping $50 on my way home from work. A trip to London? Well, I had a big credit limit. Need a vehicle? I don’t have any sort of down payment, but hey, let’s go! New video games? New DVDs? Let’s stroll through the checkout aisle without a second thought. Cable subscription with every premium channel known to man? Great!

This credit card’s reached its limit? Time to open a new one.

The number one reason I got into my desperate financial situation several years back is because I didn’t have any self control about how I spent my money. If I wanted something, I got it, even if it meant more debt.

The number one reason I got out of that situation was because I started adopting some self control when it came to my purchases. If I wanted something, I didn’t buy it unless I was already sure I could afford it while still making progress on paying off our debts.

How did I get that self control?

I started working for something other than the desires of the moment. I spent some time re-evaluating my life and I came to realize that there were an awful lot of things that I cared deeply about that I just wasn’t taking care of. I wanted a great life for my children, largely free from want when they were young at least. I wanted to be able to be at home with my kids when they were young as much as humanly possible. I wanted to someday be able to make a career leap into being a writer. I eventually wanted the ability to not work at all if I didn’t want to.

These were big dreams, and I was exchanging them all for the “freedom” to go buy a new DVD or video game when it would hit stores. I was swapping those big dreams for the ability to watch The Sopranos every week. I was giving up those big life goals so that I could splurge on more books than I could ever read – and I’d buy them less than a mile from a wonderfully stocked library.

The “freedom” to buy whatever you want whenever you want isn’t really a freedom at all. It’s another trap, one that keeps you from having the big things in life that you dream of, one that keeps you working in a career path that you might want to change, one that keeps you from wanting to open the mail.

It’s one that leaves you up at night, searching Google and hoping that someone out there has the answer to your financial situation.

I have the answer. Figure out the big things you want in life and put them first. Stop buying stuff that you don’t really need. Live lean for a while and focus on getting rid of your debts. Set aside just a little bit of “mad money” each week or month that you can splurge with, but keep your splurging within those narrow bounds.

In short, spend less than you earn.

The magic ingredient is self-control. Do you have it?

The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on

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