How to Live Within Your MeansFeb 11, 2021
Did you know your life’s trajectory can be determined by how well you handle your finances?
You may have heard about it before, but living within your means can ensure you are more financially responsible and able to enjoy more peace of mind.
To live within your means, you have to spend less than you earn, keep your budget in control, and avoid debt like a plague. But we all know, this is easier said than done.
For many people, the idea of living within your means is too difficult to live out practically.
You are drawn into the trap of spending more than you have and are not able to make the decision to cut expenses once and for all.
It’s easy to buy more things even above what your income can carry.
Our world today provides thousands of ways you can continue spending, living the life of the bright lights, flashy items, and bold colours.
With credit cards, you can get anything in just a swipe, online shopping has made it easier to buy stuff from the comfort of your home, and with tons of marketing ads and emails, it becomes even harder to decide living below our means.
Add to that social media, with people showing off their tempting lifestyles and successes, it can all be too cool to ignore.
These and many more are the reasons why people can’t live within their means.
But this lifestyle isn’t sustainable and at some point, such reckless spending will catch up with you.
What are the benefits of living within your means?
While learning to live below your means might take some effort at first and even be difficult initially, as you get into the groove of things, you’ll enjoy so many benefits that you’ll wonder why you didn’t start it sooner.
Here are some benefits from adopting the ‘live within your means’ lifestyle:
- You grow your savings quickly and become financially independent sooner.
- There is less stress in general knowing your finances can hold things together if emergencies in your life or the life of your family members occur.
- You live a life of freedom being able to spend more time with your loved ones and do what you like such as go on vacations.
- You can own the things you want (e.g home and cars) rather than incurring debt.
- You don’t have to work till you are old to retire.
- You can take advantage of investment opportunities that show up unexpectedly.
10 tips to live within your means
If you’re confident that you can achieve financial freedom by living within your means, here are 10 simple tips to get you on your way:
- Know-How Much You Make: To live within your means, you need to know what you earn and how much goes out on bills so you better match income to expenditure
- Budget: Having determined what you make, create a budget to plan your expenses and to keep spending on track.
- Boost Your Income: Boost your income with a side hustle, a second job, or a higher paid job to give you a buffer and extra money towards paying off debts, saving and investing.
- Stop Relying On Credit Cards: Rule out credit cards as a way to buy things. Covering living expenses with credit cards is not a way to live within your means but rather to make the banks rich by paying tons of interest.
- Separate wants and needs: You can save tons of money by differentiating between your needs and wants. Just don’t buy anything and everything. First, decide how important it is and if the purchase is in line with your goals and values.
- Don't Try To Compete: The pressure of what you see on TV, Social media and things around can get you spending on things that cause lifestyle creep. Resist the urge to get things because others are buying them.
- Save Up For Purchases Instead Of Putting Them On Credit: Don’t buy large things you can’t afford, instead save up some money monthly to buy it outright. By doing this you are building the habit of only buying things you can afford.
- Build An Emergency Fund: With savings dedicated to emergency, you won’t have to resort to credit during financial emergencies, and they will come.
- Develop your financial literacy: Instead of saying ‘I don't know how to budget, save or get out of debt’ and doing nothing about it! Seek out professional help to support you in solving these problems. You can also learn it yourself by utilising blogs, forums, and how-to videos online where there are tons of resources to help out.
- Don’t Deprive Yourself: Living within your means does not imply depriving yourself, it’s just being real with what you can and can't afford, focusing on the things that really matter to you and always looking at the higher picture.
And it’s a wrap
There are so many benefits to be gotten from living below your means.
It gives you more control over your finances and above all, makes you less stressed from the constant pressure to live in a way that doesn't feel right.
When you begin to live within your means, the results are instant as you start to add more money to your savings and to worry less about things.
While some of the tips may seem like small wins, by keeping with such mindset over a long period of time, it will build up and you would start to witness serious changes in your life generally.