Practically Speaking: Are You Entitled?

Here's the plain truth about your money.  You are entitled only to what you can afford.  It bears repeating because it's so very important yet something many people ignore.  You are entitled only to what you can afford.  That's really all you need to know to do a budget and keep yourself on track.

This is one of the biggest hurdles in the way of a strong financial position for many people I know.  It doesn't matter what your friends have for stuff.  It doesn't matter what kind of cars are parked in the parking lot at work.

You are not entitled to a cell phone like your buddies if you can't afford to pay the bill for it every month.  You are not entitled to a closet full of brand name garb if you can't pay cash for it at the register.  You are not entitled to a home in the swanky part of town just because your best friend could afford it.

In fact, it doesn't matter that you aren't paying on a loan anymore for the Moto Guzzi in your garage if you're in a position where you're having trouble making ends meet.  Sell it and pay down debt or give yourself the emergency cushion you need.  Buy one later when you can truly afford it.

I hear the statement, "but I should be able to afford it if (so-and-so) can."  My first question in response is, "how do you know they can afford it?"  There are so many people out there living high off the hog yet living paycheck to paycheck too.  You never know the story inside someone else's checking account just by watching what they buy.  My second question is, "why do you care?!"  What someone else can afford has nothing to do with you and yours.

The best advice I can give you is to forget about keeping up with the Jones'.  They aren't paying your bills.  They aren't the ones that have to dig you back out of debt.  They aren't the ones that will stay up at night worrying.

Rather than spending your money on things that keep you in some "status", deposit the money in a savings vehicle.  Get yourself to a place where you can buy what you want when you want it without worrying about how pinched you'll be.

Read the book The Millionaire Next Door: The Surprising Secrets of America's Wealthy.  See who really has the money in America.  See how they got their riches.  They majority aren't rich from the lottery or an inheritance.  They save, they use coupons, and they buy used cars.  Oh, and they live as though they are entitled only to what they can afford.

Heather Montanaro: Money Correspondent:

Heather's column, Practically Speaking, published 3 times a month to Gather Essentials: Money presents practical advice for everyday living and provides insight on how to pair lifestyle choices with financial realities.

Heather Montanaro holds an Executive MBA from Northeastern University and has held senior positions with local technology and service companies.  Now she enjoys staying at home with her 2 young children.  She's made the adjustment from 2 to 1 incomes and enjoys helping others reach their personal goals as a Budget Coach.

You can find all of Heather's Practically Speaking columns at tag: budget coach

Keep up with Heather's other postings and Gather activity by joining her Gather network - just click here budgetcoach.gather.com and select the orange "Connect " button on the left-hand side of the page.

You'll find Heather and other Money Correspondents, plus celebrity content and plenty of other Money experts at Money.gather.com.