How to Live an Abundant Life

Now, let's discuss a simple method by which you can achieve financial abundance. Yes, it’s true. There is an easy way to live a comfortable and abundant life, and a key part of that is managing your expenses.

Everyone desires a good life. It's true that to live, we need to spend money. However, it’s often observed that people with high incomes sometimes struggle financially, while those with modest incomes manage to live comfortably with fewer financial challenges. Have you ever thought how that’s possible? Let us explain it now.

In reality, there is no direct link between how much you earn (your income) and the quality of life you lead (the way you live). The secret lies in how you manage and spend your money. The number one skill for living an abundant life is the ability to control your expenses.

Income

We are all educated, with some of us being doctors, engineers, astronauts, or professionals in various fields. Despite our diverse educational backgrounds, there is one common skill that education has provided us: the ability to make money. Regardless of the type of education received, the system is designed to teach us this fundamental skill: "How to earn money." The entire education system is structured to make us employable, equipping us with skills that we can later trade for money.

Unfortunately, no education system teaches us how to make the most of that money. There's no guidance system in our society or in the education system on what to do with the money once it's earned. The crucial question, "Now that I've earned this money, how should I spend it? How can I use this money to live the life I desire?" is rarely addressed.

Just as earning money is a skill, so is spending it wisely. Whether we accept it or not, you should develop the skill for spending money effectively. Sadly, our education system never talks about this essential skill of managing expenses.

Managing Expenses Effectively

To manage expenses effectively, the first step is to understand what they are. Expenses generally fall into two broad categories:

1. Expenses on Things We Need: These include essential items like food, clothing, and other necessities required to maintain a certain quality of life.
2. Expenses on Things We Want: These are items that we desire but don't require. For example, you might need a mobile phone that costs around 4-5 thousand rupees, but you might want an iPhone that costs around 1 lakh rupees. There are several reasons why we indulge in buying things we want, and understanding these can help in controlling our expenses.

Reasons for Spending on Wants

1. Comparison: One of the primary reasons we buy things we want but don't need is because of comparison. For instance, if someone you know has an iPhone, you might feel compelled to buy one too, even though you don't need it. This comparison drives unnecessary purchases.
    
2. Convenience: Another reason for spending on wants is the desire for convenience. For example, you might need a car, but you choose one with air conditioning because it offers a more comfortable experience, even though a car without AC would suffice.
    
3. Conditioning: The most subtle and influential reason is conditioning. We are constantly influenced by our environment to buy things we don't need. Malls, online shopping platforms, and advertisements are designed to entice us into purchasing items simply because they are available. A few years ago, buying something required effort—you had to leave your home, go to a store, and make a purchase. Now, with online shopping, you can browse and buy items with just a few clicks, often without fully considering whether you need them.

The Role of Credit Cards in Conditioning

Another aspect of conditioning is our relationship with money, especially in the context of credit cards. Spending hard cash creates psychological pressure, making it difficult to part with money. However, credit cards have made spending much easier because you don't see the money at all. This convenience can lead to spending money you haven't yet earned, contributing to financial strain.

Understanding well these factors—comparison, convenience, and conditioning—can help in controlling your expenses more effectively. By understanding the difference between needs and desires and being aware of the circumstances around you, you can make more proper financial decisions.

Understanding the Mental Trap of Spending

Another method of conditioning people into spending more is by introducing wallets, making it easier to part with money. When you don't physically see or handle cash, it becomes much easier to spend. The absence of physical cash means you might not even feel or analyze how much you are spending. This lack of awareness is why you don't hesitate to spend and often don’t think twice before making a purchase. It is intentional—they don’t require you to think, they want you to only buy, buy, and buy. Over time, this habit becomes an addiction, leading you to say "bye-bye" to your money. Can you see the mental trap now? The impact of this conditioning is deep, almost ingrained in your behavior.

Our environment is structured to keep us buying. This is why expenses tend to rise whenever your income increases—whether through a raise at work or profits in your business. But why does this happen? It’s because your brain has been conditioned. The mental "software" has been altered so that as your income grows, your spending does too. It is the result of mind-conditioning, and it's a major factor affecting financial stability by your decisions.

Now that the reality is clear, how do you save money despite this conditioning? There’s a simple method to reduce expenses, but it requires brutal honesty with yourself. The next time you go shopping before you purchase or even touch anything, ask yourself, “Do I need this, or do I just want it?” Take a moment to think. If the answer is "I need it," then go ahead and buy it without worry. However, if the answer is "I want it," be honest with yourself and ask, "Can I postpone this?"

If I simply tell you not to buy it, you might feel bad or rebel against the idea, and likely end up buying it anyway. Instead, tell yourself, "I'll postpone it and buy it next month." When you do this, the initial urge to purchase might fade, and you may find that you no longer want the item later. This practice can help you emotionally stabilize and prevent unnecessary purchases. Develop a habit of asking yourself by heart & mind whether you want or require an item.

Warren Buffett's quote fits here: "If you buy things you don’t need, eventually you’ll have to sell things you do need." This is true—spending excessively on wants can lead to a point where you must sell necessities. Buffett’s advice is especially valuable given his immense success.

However, simply saving money or controlling expenses won’t lead to financial abundance on its own. The next crucial step is to invest the money you save or the money you refrain from spending. This money needs to be invested in a way that generates returns greater than the rate of inflation, which might require professional guidance.

So, must develop a habit of asking yourself by heart & mind, "Do I need this, or do I desire it?" Train your brain to prioritize needs over wants, save the difference, and invest wisely. By practicing it, you can make extra wealth and achieve proper financial growth. This process doesn’t require extraordinary intelligence or a high income—just self-discipline. With self-discipline, a financially abundant life is within reach.