The Bottom of the Money Pyramid


There is one rule, law, commandment, or whatever else you want to call it that is essential to becoming wise with your personal finances… Spend less than you make. I like to call this the bottom of the pyramid because without this skill, becoming financially successful will be extremely hard if not impossible.

The cliche things we often hear are what end up making us rich.  In this article, I’m speaking about managing personal money, not business finance, and not investments like real estate, which many people use debt/leverage to purchase. Real estate investors often spend more than they earn, but it’s for investment purposes, not on personal things. 

Cash in >= Cash out

(money I make should be less than or equal to money I spend)

As someone who has always been drawn to personal finance, I’ve discovered that there are many tips and tricks that can help in saving money, investing well, and building wealth. The most fundamental rule of all is to spend less than you earn.

This golden rule, I firmly believe, is the key to financial success. It may appear simple, but from personal experience I can confirm that it’s annoyingly difficult sometimes.

We live in a world where we are constantly told to buy more, upgrade our lifestyles, buy a new car, a new house, a new Xbox, and keep up with the people around us. “I deserve to spoil myself” is a quote that comes to mind that I hear often. All of those things are wonderful! But I’m not going into debt to obtain them.

Quick and easy is usually a sign of a poor financial decision from what I have experienced. Debt is almost always tied to the Quick and Easy choices. Many salesman will call it ‘leverage’ when referring to investments.

It’s so easy to take the quick route and press ‘buy’ with a credit card. It’s so simple to go to a car dealership and ask what the absolute highest monthly payment I can afford would be and getting the best car today instead of saving up the cash.

“It’s called leverage on the way up, and debt on the way down” – Alex Horimozi

Spending more than I make = going into debt = probably bad 

No matter how many money-saving techniques or investment ideas I use, if each month I always sink deeper and deeper into debt, I’m not going to be financially successful. 

There’s one method I’ve used that has worked well in keeping my spending under control without the need of a crazy budget, or a elaborate financial plan.

I try to keep my spending to one account or type of payment, whether it’s cash, debit card, checks, or credit cards.

This helps a ton if/when you are married because it allows us both to know where our finances stand at all times, by easily checking two accounts.

Why is this effective for me? For starters, it makes things simpler. When everything is in one location, it’s lot easier to keep track of my spending. I don’t have to worry about a dozen credit card bills or juggling different bank accounts on a daily basis. (P.S. I’m not saying I don’t have those things, I’m just saying for 99% of daily activity I use 1 checking and 1 credit account)

I normally only need to look at two accounts.

  1. My credit card balance
  2. My checking account balance

* * We do change the credit card we use if we are getting some kind of “air miles” bonus, but that is a separate strategy we use while we are in the military in order to travel for free/cheap. When in Europe, we use a debit card linked to a single European bank account.

More importantly, it makes me more mindful of my spending habits. When I use one method of payment, I tend to check that account more frequently and pay closer attention to my transactions. This makes it easier to find areas where I may be overspending or where I might make changes. It also keeps me informed if I forgot to cancel a subscription, or if there is a fraudulent charge on the account.

I’ve discovered that utilizing a credit card for all of my purchases is what works best for me. This allows me to keep real-time track of my purchases and because we have wiggle room in our checking account, I’m not worried we will spend more than we have in that account. However, if we do spend more one month than normal, we just adjust the next month and happily continue the habit.

I like to think of the strategy as “mental accounting” except unlike real accounting where you have many accounts to manage, we just have the two for our daily lives.

If we started from $0 all over, and had to learn money skills from scratch, I’d probably make a budget for 1-2 months just to see where my money is going. I believe that mental accounting only works for me becuase I have a solid idea of where we spend. I’m pretty aware of our monthly grocery spending, our insurance costs, rent cost, etc. If you’ve never done a budget, many times we don’t realize where we spend a majority of money, and a budget helps see exactly where our dollars are spent. I think monthly budgeting for the rest of your life is an extremely difficult thing to do and it’s a habit that is unlikely to stick.

Most people also hate budgeting and think of it as a negative thing, which is why I’d only do it for a few months to see where my money goes, then figure out my own strategy which is what I currently have done. I would also just use a debit card until I build a good foundation.

At the end of the day, the best thing is to choose and stick to a method that works for you. You can lay a strong foundation for financial safety and set yourself up for a lifetime of success by spending less than you make no matter how large or small your income is.

A few other options to get your finances in order are budgeting, hiring a counselor or coach, or any other method of learning the skill of money (books, courses, my articles, etc…).

The easiest way I’ve found is monitoring my credit card and checking account once a day and understanding what I can and can’t afford, which is quite simple to do if debt is not an option and this method has worked for me.

If it works well for you please let me know. If you do a modified version I’d also love to hear the methods you use. Everyone has different lives and goals, that means we will all have different financial priorities, and will use our money vastly different.

If you enjoyed please take the time to leave a comment, and sign up for my e-mail list to get new articles sent your way each time I post them.


I want to be clear that this is not advice. This is just what works for me. If you want to find a great strategy for yourself I’d recommend going to talk to a professional financial advisor. CFP’s are good individuals to talk to and they can make a personalized plan for you!

Published by Christal

I write to share my experience of going from $0 to a millionaire and what I am learning along the way. Working toward that goal one day at a time and sharing the tips and tricks I'm trying.

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