What’s the most underrated life skill?

View all responses

My answer is going to be biased, because I taught personal finance to college students for about 25 years. I also have done research on credit use among college students. Of the myriad life skills one could learn, I think the most important (and underrated) is living within one’s means.

This is not an easy skill to develop. We are bombarded with messages encouraging us to live beyond our means. Advertisements for products and services are only the most obvious of these. Media, from those commercials to sitcoms to influencers, sell us a lifestyle to aspire to, if only we had the accoutrements for it.

It’s also easy to prioritize instant gratification. A present to ourselves now feels better than waiting till later. We may not even be alive tomorrow, the saying goes. And we step onto the hedonic treadmill, buying the next high until it wears off and we have to buy again.

Living within one’s means requires saying no to ourselves. It also requires understanding where our money goes, which requires tracking spending and making decisions where to spend. In other words, it requires budgeting, and that means extra work and thought. 

Living within our means means not mortgaging our future. When we buy on credit, our actual purchases are 6-18% more expensive because we’re paying with interest. It cuts into our perception of economic well-being. 

Living within one’s means is an important and underrated skill that will help us live more solid lives.

NOTE: What about if you can’t live within your means because of low income or high bills? That’s a different thing altogether. I would definitely recommend doing one’s best to live within means, taking advantage of social and public supports such as government programs, food pantries and clothing closets and the like. I also discourage the use of “alternative credit products” available to people in poverty, which exploit the poor and cost them much more than traditional credit. But I will not judge.