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The Happiness Spending Threshold And What It Really Means To Live Within Your Means
MAY 31, 2017 07:00 AM 20 Comments CATEGORY: General Planning
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EXECUTIVE SUMMARY
“Try to ‘live within your means’” is a staple of prudent financial advice – recognizing that not everyone earns the same income (“means”), and therefore not everyone can afford to spend the same. It prescribes that rather than trying to keep up with the Joneses – and their lifestyle spending – you should live within your means, instead.
Yet the challenge is that as income rises, living “within” your means can produce what is, to most other people, an outsized and larger-than-life standard of living. In other words, while it might seem like prudent advice for those who are of struggling means – and therefore, must constrain their spending down to their income means – those who lift their spending up to live within their (much greater) means may be viewed with disdain
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To “live within your means” simply means to spend less on your lifestyle than you generate in earnings. ... The implication: they're not living well within their means, and instead are spending right up to (or beyond) their limits, such that there isn't much of any slack available.