Let’s say you’re a student and poor. You live cheaply, eat ramen every day, etc.

Now you get your first real job. The amount of money at first will seem crazy. There will be the temptation to just splurge, buy watches, fancy apartment, fancy car on loan, etc. This happens every time your income increases significantly.

Now let’s say you get fired. Suddenly you have the loans, the bigger apartment, etc but no way to pay for it. This will be very stressful and you may have to do things you don’t want to.

Imagine instead you didn’t have the car. You got a modest apartment, and saved some money. You have no debts, and can easily take half a year to get a new job no stress.

So when I say live below your means, I mean do not give in to the temptation to splurge. Spend less money than you make.

Try to put at least 30% or so of your income to the side (aim for 50%). Make an emergency fund of at least 3 months worth of expenses. Then start putting money into tax-deductible retirement funds and ETFs.

Most importantly, never take loans and keep monthly expenses like subscriptions to a minimum.