I recently came across this piece of financial advice and just had to read more. After reading the explanation and giving it some time to digest, it makes perfect sense. The idea is to live like a broke college student for as long as you can. Too many times, once an individual graduates from college and lands that first real job, they suddenly realize that they are making $40,000 a year or more and can afford to get a brand new house, new car, maybe a boat and/or jet ski, and then actually do acquire these things.

While this is fine and a person who makes a decent amount of money is entitled to a few nicer things and a few toys, the majority of the people get too much butter and forget to buy guns. It’s OK to get a little bit of butter, but when you have the extra income, you would be much better off investing/saving it and/or paying off whatever debts you may have.

If as a college student with a job you were making say $14,000 per year and getting by and keeping the bills paid, when you suddenly start making $40,000 per year there is no reason that you shouldn’t be able to take $10,000 to pay off debts and $10,000 to save for the future. This still gives you $6,000 more per year (or $500 per month which means adding almost an entire extra pay-check each month if you were getting paid every 2 weeks before) to spend day-to-day than you had before. Yet, many people spend the entire extra $26,000 and forget to save for the future.