Reader Question: What Is the Most Basic Concept in Personal Finances?

I recently received this question from a reader:

What is the most basic concept in personal finances?

I love these questions because it forces us to go back to the basics of what personal finances are all about. To me, the most basic personal finances concept is this:

Spend less than you earn.

It doesn't get much more basic than that. If you have a set income, adjust your budget so that you always make less than that.

Or, you can look at it another way: Make more than you spend.

The idea of making more than you spend is interesting to me, because it assumes that you can take an active role in increasing your income. Whether it's creating another revenue stream, taking a second job or asking for a raise, making more than you spend is an active decision that you make to increase your income to cover your expenses.

Tags: personal finances, concept personal finances, basic personal finances, budget, reader question, revenue stream, making money