Spend Less Than You Earn – A Key Financial Principle!

May 17, 2017Building Your Future

Last month, we talked about the importance of having a financial plan and introduced the five financial principles that FaithLife Financial uses to guide Members on their journey to be wise with money and live generously.


This month, we’re going to review principle number one – spend less than you earn. About 30 years ago, I had a conversation with a wise friend, which I will never forget. I said, “If I could just earn twice as much as I do now, I’d be completely set.” He smiled and replied, “No you wouldn’t David.  What happens when you earn more is that you’ll adjust your lifestyle to match your income and then some.” I have to admit that over the years, I learned he was right.

When people earn more, they tend to spend more.  With each pay raise, it is easy to let expectations, wants and desires drift higher and higher. It takes discipline for each of us to spend less than we earn. This is a continual journey and it isn’t as easy as it sounds.

A 2016 poll, conducted by the Canadian Payroll Association*(CPA), found that 48 percent of respondents said they rely on each payday to cover their bills – with 40 percent admitting they spend an amount equal to ALL or MORE of their net pay each week. Patrick Culhane, CPA President and Chief Executive said, “A significant percentage of working Canadians carry debt, have a gloomy view of their local economy and are fearful of rising interest rates, inflation and costs of living.

If your hard earned dollars are spent before they even hit your bank account, it’s time to take a closer look at your finances and ask yourself whether you have an income problem or a spending problem.

10 tips for spending less than you earn:

  1. Control impulse buying – pause before you purchase and take time to ask yourself if this is a need or a want.
  2. Limit shopping trips and visits to online shopping sites – if the hardware store or Amazon is your weakness, stop going there frequently.
  3. Plan your purchases – shop with a list and learn to save for the extras you need/want.
  4. Use cash instead of credit – credit card companies charge as much as 18 to 28 percent in interest annually on outstanding balances.
  5. Commit to the process of tracking your spending – you can’t tackle a problem you don’t understand; know where your money is going each month.
  6. Track expenses for 30 days – calculate all recurring monthly expenses and all total receipts for spending on non-essentials like eating out, entertainment, hobbies, etc.
  7. Create a spending plan – analyze the information you gathered and use a convenient online tool/app like You Need a Budget or Mint.
  8. Follow your spending plan – use your online or mobile app to keep track of every single expense.
  9. Give yourself time to adjust to the spending plan – it can take a month or two to get on track with a new habit.
  10. Prepare a plan with a financial advisor – they will help you develop an approach to spending that will help you make the most of where you are now, without losing sight of where you want to go.

As Christians, we have a wonderful opportunity to impact our families and our communities by changing how we view money. If we live with a mindset that more is better – we won’t ever feel like we have enough. Guarding against materialism in North America is a challenge but we can start by spending less than we earn to live within our means.

This key financial principle can actually lead to a “surplus mindset”.  What do I mean by a “surplus mindset”? It’s the feeling of having enough for yourself, your family AND enough to share. This mindset comes from the idea that happiness and financial security have little to do with how much money we have and a lot to do with our view of money and the role it plays in our lives. When money is viewed as a goal – it is about getting it and keeping it. However, when money is viewed as a tool, it is about using it to serve God, your family and your community.

FaithLife Financial does more than help you manage your finances. We help you make wise money choices through every phase of your life. Join us on the journey to a healthier relationship with money by visiting to request a FREE copy of the book, Your New Money Mindset (while quantities last). You may also connect with one of our Financial Representatives who would be happy to conduct a free financial review with you.

FaithLife Financial is a financial services organization that helps Christians blend faith and finances to be wise with money and live generously – strengthening families and communities. David Baker has been in the financial services industry for over 25 years. He lives with his wife and two children in Waterloo Region where they are active members in a local congregation.


*The 40-question Canadian Payroll Association survey was conducted online by Framework Partners between June 27 and Aug. 5, 2016. There were a total of 5,629 employees who responded from a number of sectors including forestry, manufacturing, government, oil and retail.








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