recreatingreality.com

For so long, everyone talked about earning power. Of course, we all want to earn more. That’s human nature. However, if you look at many families today you may notice that those who have a job with less earning capacity are weathering the economic crisis better than some of their neighbors who liked to brag about their high paying jobs.

The truth is that earning capacity has little to do with savings. In fact, many of the high earners are steeped in credit card debt that would wipe out their financial stability if they were forced to pay off all their debts today. Many of the high earners have mortgage payments that would cause their financial collapse if they were to lose their jobs. Of course, we are not saying “all.”

It’s not what you earn that is important. It is what you keep. If you are in the cohort that has high earnings and you have high spending habits, chances are you are in deeper financial trouble than the factory worker next door.

If there has ever been a time to take a close look at your spending habits, today is the day. Financial solvency comes from spending less than you earn. Like it or not, we have been forced into a situation that should serve as a wake-up call for all of us.