According to performance coach and former clinical psychologist Dr. Julie Gurner, it’s the major life decisions you make that determine how much financial stress you’ll be under. “I advise even my high net worth clients to live below their means, which sets them up for an easy life ahead and far less stress,” she said.
This doesn’t mean taking a vow of poverty, but it does mean considering your quality of life in the long term, rather than simply living in the moment. For example, the type of home you buy can lock you into an expense that might be at the top of your limit now, but end up being a burden if your business fluctuates. “By getting a fantastic home that isn't a reach at your peak, you can set yourself up for a comfortable life long-term,” said Gurner. “Decisions like this around homes, cars, clothing and spending can make all the difference.”
“The truth is that few items are necessities and status is perception, not reality,” said
Byron Tully, author of ”The Old Money Book,” and “Old Money, New Woman: How To Manage Your Money and Your Life.” “To give yourself the best shot at financial health — if not financial independence or wealth — simply earn more than you spend on a consistent basis. It's simple, but challenging to do in a consumer society.”
Another upside to this approach: When your financial burdens are lessened, you have more scope to take risks in your career, because you don’t need an excessive income to maintain your lifestyle.