Probably one of the most common reasons people have money problems is because they live a lifestyle that either perfectly matches their income (spend all you earn) or, more commonly, they live a lifestyle that is beyond their means (spend more than you earn).

David Grant CBE, the former Lord Lieutenant of County Durham, whom I knew from my fundraising days, once gave me a brilliant piece of advice about living beyond your means. He said: ‘If you can’t afford it, face facts – you can’t. Don’t buy it. If you think you can just about afford it you probably can’t so still don’t buy it. And if you are certain you can afford it then try and get it in a sale.’

The ‘appearance’ of wealth

I never really knew what he meant by that until I became involved in a business where image was everything . . . and I got a taste for expensive cars. I agree expensive is relative but I was sure people would be judging me by the type of car I was driving, so I pushed the boat out and bought a huge Mercedes. I must say for the first few months it was something else – lots of admiring glances and ‘life must be good’ comments.

Then it needed a service. I remember looking at the servicing bill, thinking: ‘I could buy a car for that.’ A few admiring glances and comments later my ego was suitably polished and I was smiling again. Well, that was until it needed a new set of tyres. Then when I crashed it one icy night and had to have the wing resprayed, I started to go off my pride and joy. And just when I was feeling down about it, the new model came out and I still had three years left to pay on the old one!

However, it gets worse, because when you have that kind of car people think you are ‘minted’. It was always me who was expected to pay for the first round, chip in for this and that, source amazing gifts and be ‘the life and soul’. For those of you reading this who spent time with me then, here’s a confession – I couldn’t afford the lifestyle!

Looking back at those times, I have to laugh – it was all about what other people thought and once I’d created the image I had to stick with it. The point is my real friends didn’t care, my wife didn’t care and my kids didn’t care.

Reality check

So, if you’re living a lifestyle that’s costing way too much here are a few ideas to help you get back in check:

• Who are you doing it for? Is it for you or is it for ‘them’? If it’s for you, ask yourself if it’s the authentic you. If it’s for them, then it will be a good test of friendships and relationships when the spending stops.
• Become values driven. There aren’t too many people who want to have a value of ‘lifestyle beyond my means’ but it might be quite good fun to have ‘best value’ or ‘frugality’ as one of your principles.
• Learn to say no (or versions of it): ‘Not right now.’ ‘Can I get back to you?’ ‘I’ll need to check in with someone first.’ These are all wimpier (but effective) ways of saying the big NO!
• Tell your ‘friends’ you are under investigation. Don’t say by whom or about what, but insist you need to keep a low profile and can’t be seen spending for a while.
• Slow down and shop around. A friend of mine bought a Mercedes around six months after me. It was exactly the same model only a different colour. He’d saved thousands by bidding for it at a car auction. As he paid for it the cashier commented: ‘Nice car, great price and all because someone was living beyond their means.’