Secret to success on a modest income

This post comes from Len Penzo at partner site Len Penzo dot Com.

Earlier this summer my teenage son revealed to me and the Honeybee that he has a girlfriend. Yes, it's his first one.

And as every guy who has ever dared to play the game of love knows, courting the fairer sex requires a suitor to spend a little cash on his girl now and then. At least it does for those who want to get to second base.

Now that my son has a girlfriend, I've noticed that he is still spending his money as fast as he earns it. Just not on her.

Apparently he hasn't got the memo yet.

That's right. My son has been "dating" his girlfriend for about four months, but he has yet to treat her to so much as a trip to the ice cream shop down the street.

To be fair, neither girls nor saving money seems to be at the top of Matthew's priority list right now, which is why he chooses to spend all his money on more important things. Like himself.

Well, at least that's how it is for now. But if Matthew continues to choose that inglorious path, I'm absolutely certain his love life -- along with his personal finances -- will slowly but surely begin to take a turn for the worse.

Come on, ladies; you know it's true.

Managing personal finances is all about choices too

Our position in life at any place in time is ultimately determined by a long series of decisions that have been made over the course of our lives. As we become adults, a lot of those decisions involve the management of our personal finances.

Earlier this week I got a comment from a reader who disagreed with my claim that an annual income of $40,000 is enough money to live on fairly comfortably -- even after considering payroll and income taxes.

As proof, he used himself as an example; even though he earned $38,000 annually from his employer, he still had to work on the side, grow his own vegetables, and rent out his basement in order to make ends meet.

The reader was convinced that the primary reason he couldn't meet his obligations was because his salary was too low; most folks in his predicament come to the same conclusion.

In most cases, however, the real reason people find themselves in dire financial straits is simply because they end up making a long series of poor choices -- choices much more critical than credit or debit.

It happens all the time. People get married and have too many kids too early. They buy bigger homes than they can afford. They spend beyond their means and run up their credit cards.

There are countless examples of people making less than $40,000 a year who swear they're struggling despite cutting their expenses to the bone -- all the while overlooking the fact that they spend $50 per week or more on lottery tickets, or one of the other four horsemen of personal finance.

I know someone who pulls down well over $100,000 annually who also complains, without the slightest hint of irony, that his money troubles are a direct result of inadequate income. You know the type. This guy complains about his inability to make the mortgage payment even though he has a pair of new luxury cars sitting in the driveway that he purchased within the last two years.

It's hard to spend less than you earn when you can't tell the difference between a want and a need, when you can't control your urge for instant gratification, or when you can’t understand why you're better off driving a humble sedan instead of a flashy new Infiniti while you're earning a modest income.

If you intend to successfully manage your personal finances, you have to make more right choices than wrong ones over the long march of time.

Do that, and you’ll most likely find it's possible to make ends meet no matter what your income is.

More on Len Penzo dot Com and MSN Money:

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• 19 things your millionaire neighbor won't tell you
• The only 2 financial rules you'll need
• The secret to living well on $40K a year
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