When you’re out of money, it’s the little things that matter most. Given a choice between food and mascara, which would you choose? If you’re a woman the choice is obvious, mascara. You have to feel good about yourself if you’re going to get out there to improve your situation.

This points out the biggest problem with a lack of financial resources. It doesn’t feel good. When you don’t feel good about yourself it’s difficult to take confident action towards resolving your situation. It’s the proverbial catch-22. You have to believe in yourself before others will believe in you. And it’s hard to be confident when you don’t have sufficient resources to take care of your family.

It may be hard to say no to your child when they really want something that you don’t want to give them. It’s excruciating when they’re asking for something you do want to give to them, but can’t because you’re broke. That one word, broke, really says a great deal. It lets everyone know you’re out of money and it’s also an indication of your personal condition, broken.

To be fair, just because you have financial problems doesn’t mean you’re beyond repair. So you fell down, made some mistakes, couldn’t see the big picture, didn’t notice the hammer about to fall, whatever. You’re hurting, but you ain’t dead yet! Get back on the horse, get back in the race. This time you’re going to play it smarter, at least that’s what you’ll tell yourself.

But before you can be smarter, you have to know what smarter is. One way to figure that out is to recognize what smarter isn’t. For example, look at the housing situation. A great many people have recently lost their homes. Why? Because of an idea!

When one person has an idea, we see it for what it is, an opinion. When a majority hold the same idea, we call it a reality. And that’s something to believe in!

So what was the idea about housing that devastated the economy? Prices will continue to rise. That belief supported another belief. Purchase the most expensive house you can, even if you can’t really afford it. That fueled another desire. When the market demands more expensive houses the lenders earn more when mortgages are easily obtained.

Hindsight is illuminating. We suddenly see the obvious with astonishing clarity. The bubble has to burst. The market corrects itself. And short-term gains evaporate as quickly as a pin ruptures a balloon.

Okay. You’ve decided you’re going to be smarter this time around (notice that we use the words ‘this time around’ because we know the game runs in a circle – think about it!).

Fast-forward to the present. What is a reality the majority are believing right now that may become another bursting bubble? A prevalent one is that it’s normal to live paycheck to paycheck. To be fair, when you’re just starting out and earning very little money it’s hard not to live this way. But if you’re going to be smarter then you have to break out of this cycle as soon as you can.

Benjamin Franklin told us the fastest way to wealth is to earn more and spend less. If you’ve been earning more each year for a while and are still living paycheck to paycheck, then you may be missing the spend less part of his philosophy.

It’s important to realize that there is a minimum income required for you to live comfortably. It’s also very likely less than you’re earning right now. Your income over that minimum may be helping you to live happier. Then again, it may actually be increasing your financial stress.

What would happen if you were to double your income right now? Think about how far that would go towards solving your financial problems. In spite of that windfall, within a year you’d be living at that new level of income. In other words, you’d be spending your new earnings as quickly as you did your old earnings. And you’d do this without purchasing a bigger house or a new car. Soon you’d believe you need this larger income in order to live comfortably, even though you may have been quite happy with your prior earnings.

In all probability, many people are living very happy and contented lives on a much smaller income than you’re earning right now. So why aren’t you saving more? There is usually only one reason, you believe you need something more and better. Why? It’s because of those damn Joneses and your desire to keep up with them.

A couple of years after graduating from college, I was moving up the corporate career ladder, wearing a suit and tie to the office everyday, and learning as much as I could from my superiors who lived in fine houses and drove nice cars. I wanted to be like them as soon as possible. And going into debt seemed to be easiest and fastest route.

You’ve probably heard the phrase, crash and burn. I did. I recovered. I learned. A few years later I had a new career and was on my way up again. The people I associated with lived in fine houses and drove nice cars. I was still living in an apartment. I saved my money and drove an inexpensive, reliable car. Eventually I bought an inexpensive, very livable, twin house. We lived comfortably and continued saving.

I started a business. My income grew and so did my savings. My friends drove Mercedes, BMWs, and the like. I kept my comfortable, affordable car. Starting a business is considered to be a risky venture. I think it’s riskier to live paycheck to paycheck. You’re in trouble if you miss a single paycheck. Lose your job and you’re quickly underwater. Now that’s a risky situation!

Buying as much stuff as you can, especially using credit, is not any different than buying the biggest house you can. You’re betting on an increasing income to keep you afloat. You’re also hoping that inflation won’t outstrip your gains. It’s actually worse than the house scenario because your stuff is pretty much guaranteed not to increase in value.

In fact, you won’t get anything close to what you paid if you suddenly need the money and have to sell them. Unfortunately, their real value isn’t clear until you try to sell them yourself.

The world wants to sell you BIG things, expensive things, stuff you don’t really need and probably didn’t want until you saw your friends with it. There’s nothing inherently wrong with purchasing nice things as long as you can easily afford it. The key word is easily. If you’re not saving at least ten percent of your income then you really can’t easily afford it.

It’s when you fall on hard times that you find out how much money you truly need to live. It’s much easier to learn this when you have money in savings. It’s downright heartbreaking when you have to count out spare change just to get something to eat. You begin to appreciate how much the little things really matter when you’re struggling to survive.

Don’t mortgage your future just so you can appear to be successful today. Spend what you must to feel good about yourself. Just don’t fall under the spell of conformity, of believing you need exactly what everyone else has in order to be accepted. You need to feel good about you. It really doesn’t matter what anyone else thinks. If they’re your friends it won’t matter. If they’re not then it won’t matter either. So give it the attention it deserves, and that’s just enough for you to feel happy with yourself.

You’re ready to live smart now. That means you need a strategy. A plan is something altogether different. A plan is about the steps you’re going to take, the details of your journey ahead. A strategy is bigger than that, it guides your decisions and informs your plans. When you’re considering a choice you can test it against your strategy to be sure you’re not doing something that will get you into trouble later.

For example, you may decide that a budget is necessary for you to be able to build a savings account. I came across a website a couple of years ago that has such a strategy. The website is http://www.youneedabudget.com. I’ve never used their software, but I like their philosophy, especially the notion of living on last month’s income. Using their budget methodology can help you plan for future purchases. Spending decisions can be weighed against the budget so you’ll know whether a choice is reasonable or not.

Don’t forget the other side of Ben Franklin’s philosophy. A budget will help you to spend less, but you’ll also need a strategy for increasing your earning power. Once you’re able to manage both sides of this equation with assurance then you’ll be able to weather the storms of life with confidence and poise.

Money provides freedom. It enables a greater enjoyment of life and all that it has to offer. Don’t make the mistake of limiting it to merely satisfying momentary desires. Live comfortably and set some aside for real enjoyment.

It’s nice to be able to afford an impromptu weekend getaway, without taking away from necessities. Simple enjoyments such as dinner at your favorite restaurant or a mouth-watering treat at the pastry shop down the street can soften the hardest day. That’s what money is for. Years later you’ll treasure those small moments of enjoyment much more than all those bills you paid for stuff you no longer even own.

An interesting and enjoyable life is composed of mostly simple things. Those small moments of joy will be remembered and treasured long into the future. There is wisdom in recognizing that it really is the little things that matter most of all.