I have a few simple ways you can start living within your means today. Living with your means; many of us aren’t even familiar with this term. By definition, means refers to a person’s income or assets; so living within one’s means is to not spend greater than your income or assets. It is a foreign concept in our modern world but it is a skill we can still acquire!
Living Within Your Means
I’ve compiled 10 tips and questions you can go through to help us all start living within our means. If you are like us you may be paying off some debt from times you didn’t live like this; but don’t be discouraged. It is NEVER too late to start, trust me. Living within the parameters of our budget isn’t always easy. There are certainly temptations to spend and over spend on a pretty regular basis. But ultimately we don’t want to look like we are wealthy while we are struggling to pay the electric bill.
Tips for Living Within Your Budget
- Keep track of your expenses.
Where is your money going? We found out that we ate out too much. Not only was this hurting our wallet, it was killing our waistline. Where is your money going? You can use something as simple as a budget notebook or something more sophisticated as Quicken Software.
- Make a budget.
It seems simple enough but most people don’t do it. I mean for you to sit down and write out all your income, then all your bills and lastly your living expenses. Does it add up? Do you have savings figured in? What are you allotting to get out of debt?
- Let the Joneses be…stop competing
Yes, keeping up with the Joneses is still a thing; but it shouldn’t be. Don’t play the compare and compete game because YOU WILL LOSE! Remember their nice car, new furniture and tropical vacation probably has them in debt to their eyeballs. I know a lot of Joneses that filed for bankruptcy.
- Know the difference between want and need.
Seems simple enough, right? But wants are terrible about masking themselves as needs. Let me give you an example of one I tripped over recently. Our house fridge kicked the bucket but we were blessed to get a free fridge. The fridge is pretty basic and pretty small (but we have a 2nd garage fridge too). I really wanted to break into our savings and get a new refrigerator. But my husband talked me off the ledge. Sure it isn’t what I want but it is serving our needs. I am NOT saying all wants are wrong and we should never treat ourselves. But those wants, especially the biggies, should not dip into our emergency fund (savings) or require a credit card.
- Shop Thrift
If you need something, do you shop used first? Thrift (yard sales, craigslist) shopping is surprisingly fun and a great way to save money. It might take a little work to find exactly what you want but the savings pays you in spades. This is good for both small items like clothing, home decor or kitchen goods; as well as bigger items like furniture, appliances and cars. Thrift shopping can be fun if you let it!
- Make CASH the king!
This may be the biggest key to living within your means. If you can’t pay cash you don’t need it. Period. Learn the art of saving up for something. Credit is a slave-maker; don’t fall into that trap. If you’re already in debt then make a commitment to not purchasing anymore on credit and start paying it off. I know you’re thinking, “but what about emergencies?”. That takes me to tip #6!
- Start an emergency fund, and start today!
Emergencies happen and not being prepared for them is one of the easiest ways we slip into debt. It could be a plumbing issue in the house or a tire blowing unexpectedly. It could even be medical. But they come and we need to be prepared. Dave Ramsey recommends starting with a $1000 emergency fund. Then once your debt is paid off you’re going to want to increase this to a month’s income, 3 months, 6 months and so on. Your emergency fund will keep you from using your credit cards out desperation.
- Get out of debt as fast as you can.
Debt is a huge waste of your money. Interest and fees you are paying could be going into your savings! I think the snowball method is the best way to do this. Check out this explanation of the snowball method and free debt reduction calculator from the Self Reliant School.
- Cut out money sucking expenses.
*Stop going out for expensive coffee.
*Make a list when you’re going shopping, and don’t buy anything that isn’t on that list. Period.
*Just because it is on sale or your have a coupon, doesn’t mean you need it. Shop sales, use coupons but only for items you need and use regularly.
*Cook at home. You’ll be happy, healthier and you’ll be saving money.
*Skip the gym and workout at home.
*Kick cable to the curb – Netflix and Amazon Prime are much more affordable options!
I hope these tips give you a place to start living within your means today. Don’t put it off; you’ll find that after awhile it becomes second nature. You might even find it fun! I love to find a good bargain.
Do you have any tips for saving money and living within your means? I’d love to hear them, leave a comment!
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