Learning To Live Within Your Means the Hard Way

Many regard the ‘DINK’ lifestyle (double income, no kids) as the peak income opportunity. By sharing most expenses, you have a lot of extra room for spending, saving, and investing before the costly items known as ‘kids’ enter the picture. However, early on in my marriage, as my wife and I were anticipating this lifestyle, I learned the first of many valuable financial lessons.

At the time, my wife was finishing up grad school, taking home the meager income that is synonymous with grad students. It felt more like a “one-and-a-half income, no kids” (OHINK doesn't have as much of a ring to it). As she was wrapping up her final semester she began engaging with several potential employers, all of whom were excited to pay her a substantial income. We were hopeful about the possibility of more opportunities in our cash flow and the first thing we wanted to upgrade was our housing.

Banking on this improved earning potential, we began to explore several other rental options with more space, more rooms, better locations, and accordingly, higher costs. Due to the timing of our previous rental lease, we would have to make a decision on our housing prior to my wife finalizing any job offers. With things looking extremely positive, and my wife being extremely competent, we were confident that if we committed to a more expensive situation, it would only be a few months of a tight budget before we had some breathing room. We signed on to a new space blissfully.

Unfortunately, my wife's last semester of grad school was Spring 2020.

In the months that followed our decision, the world experienced a lot of upheaval. Most organizations went on hiring freezes (including those my wife was speaking with) and millions of people were laid off, or in my case furloughed (former employer), from their jobs.

We found ourselves stuck with a higher monthly commitment and lacked the financial breathing room we were counting on. This led to the first of many “financial rules of life” for the Johnson family:

Make financial commitments based on how things currently are, not how we hope them to be.

Although we made it through the next year, it was not without taking a hit to our retirement contributions and charitable giving. This not only had a detrimental effect on the people and organizations we supported, but our future selves who are counting on us to be wise right now.

This is a common reason many wise financial counselors warn of being so willing to go into debt. As John Cortines and Gregory Baumer remarked in their book True Riches, “Having debt means you have presumed upon the future to finance your present lifestyle. That can be a scary thought. If you are 30 years old and you have debt, you've said to your 35-year-old self. ‘ hey, can I borrow some money? I'll pay you back—promise!’”

When you make a habit of committing to higher expenses when your income isn't guaranteed, you open the door to a number of burdens. When you are diligent in restricting your financial commitments, you have flexibility in emergencies and opportunities when your income increases.

Recognize what your limits are and seriously commit to staying within them.