The Greatest Piece of Financial Advice I’ve Ever Received

So many of us struggle to live within our means. Part of the reason for this is that our checking account balance is lying to us. No, you actually do have that amount in your account, but many of us forget how or more specifically when it got there. 

I used to wonder why I was so slammed up against the wall as I neared the end of a pay period. I would find myself at the grocery store the day before payday, wondering whether or not I should use my credit card or move money from savings into my checking account. 

How the heck did this happen? Well, it turns out that I was misreading my checking account balance. This was causing me to spend beyond my means quite comfortably the first week or so after being paid—a false assurance. It wasn’t until I received one tip from a financial advisor through my Native American tribe that helped me look at my checking account differently, to live within my means, and start putting savings away. 

The first thing you should do when you get paid is to move everything that had existed in your checking account before payday into savings and act as though it never existed. That will force you to truly live on your salary and not feel like you have more because of what remained from your last pay cycle. 

She was right—I hadn’t been seeing a realistic picture of my means due to the remnants of my last paycheck artificially inflating my checking account balance.

Her advice sounds ridiculously simple, but it worked. If my paycheck hit my account on top of, say, $300 that was in there before, that $300 got thrown into savings. Now, every time I look at my checking account, the only info looking back at me is only what my most recent paycheck had left and the spending since then. This little behavior has forced me to more diligently stick to my budget but also to truly live my means. No matter how much is left over, it goes to savings. As far as I’m concerned, that money is stowed behind a rock on the moon.

Anyway, I hope this helps someone as much as it helped me. 

Ken Lane
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