You’re probably familiar with the adage “live within your means.” But what exactly does this entail? Simply put, living within your means is spending less than you earn each month. This creates the potential to save money, and allows you to lead a life that is free of constant financial stress.
Budgeting and restricting your spending can sound austere and joyless. But creating a lifestyle that caters to your earnings can actually provide you with financial fulfillment and a sense of freedom.
Here are some easy methods to help you succeed and achieve your financial goals:
Be Prudent With Your Credit Card Habits
Credit cards should be used prudently. However, we’ve all experienced the potential pitfalls of putting off payments, accruing interest, and spending too much on new trends. It can be immensely tempting to rack up credit card expenses with the mindset of “I’ll deal with this payment later.”
It’s time to take a step back!
Paying your credit card off completely each month prepares you for your next 30 days with a clean slate. Additionally, monitor your expenses and try to avoid the temptation of buying frivolous items immediately. Instead, take a step back and ask yourself if this purchase falls into the “want” or “need” category.
Likely, most things are in the “want” category, and you can delay your purchase until you have the proper funds.
Be Deliberate About Every Penny You Save
Know exactly how much you allocate to your savings account each month. Creating a financial safety net is important not only for responsible finance management, but also for your mental health. Living a lifestyle that allows you to put some money aside gives you peace of mind and reduces stress.
- Stay In – Instead of always going out for coffee or drinks, a great way to save money is by having your coffee or cocktail at home. Make video chat coffee dates with your coffee shop group or plan a virtual happy hour. This will help you stay on track while still enjoying social activities.
- Automate Transfers – Another simple way to save is to set up an automatic transfer to your savings account each month. This way, a portion of your income will be diverted to your savings account and you’ll never forget to make the transfer.
- Save for the Big Things – Whatever your goal might be—a vacation, a house, a new car—save with intention. Having a concrete goal for your money motivates saving and focuses your budget when you’re tempted to make unnecessary purchases.
Mind Your Own Finances
Just because your friends can afford to buy lavish dinners and new shoes for each season doesn’t mean that you need to follow suit. When you learn how to set boundaries, you take care of your personal and financial well-being.
Whether you’re running your business from home or saving for retirement, your financial health is your business. Don’t feel pressured to make unwise investments or hop on a startup bandwagon. Go at your own pace and work with a broker dealer network to find the investment strategy that works for you.
Be Conscious Of What You Already Have
Budgeting doesn’t entail deprivation. Instead, it provides a framework through which you can thrive and live your best life. Take a moment to appreciate all the assets you already have, and how your life is enriched through relationships and experiences.
- Write It Down – Take time to reflect on gratitude and start a journal. For future purchases, make a list of what you want and reflect on those items over time. Likely, your desires will shift and the “cream will rise” so you gain insight on which expenses will add the most enjoyment to your life.
- Everything Old is New Again – Scratch the retail itch by shopping second hand. Shopping second hand is not only budget friendly, but also friendly for the environment. Look for online second-hand networks where you can easily compare prices. Additionally, reuse and repurpose forgotten clothing from the back of your closet. With a little TLC, you may discover some hidden gems!
Don’t Sweat The Small Stuff
Living within your means takes time and patience. While limiting extravagant purchases is wise when you want to scale back, be kind to yourself when small indulgences slip through the cracks. Sometimes you need to buy yourself an ice cream cone, and that’s just fine. With conscious spending, saving, and appreciating what you already have, you’ll be on your way to living a life free of financial stress.