The impact of living within your means is huge on your personal finances. It can help you feel relief, remove debt, ensure you are saving money, stops you from living paycheck to paycheck, and can help you invest more for your future.
Here are some tips to get you on the right track as well as to ensure you don’t feel like you can’t enjoy spending money from time to time either. It’s important to note that some of the tips are very basic level items and others you may not have thought of currently. So stick with me!
1. Know Your Income (Monthly and Yearly)
The first thing you need to really understand is your monthly and yearly income. Too many people guess or think they know these numbers without actually writing them down or calculating. It’s the easiest way to see where your income is at and where your expenses or spending might be causing trouble.
2. Negotiate Recurring Expenses
Maybe you have not cut the cord with cable yet because you really love sports and the programming or looking for cable alternatives. You can reach out and negotiate lower rates or even switch providers to save money. It might not make a major impact but a couple hundred dollars a year can be helpful. And if you have a few expenses like this where you can negotiate or switch, the money you save will definitely add up.
3. Rewire Your Money Mindset
Probably one of the more challenging tips is to rewire your views when it comes to money. That’s learning to master things like needs vs. wants, to stop worrying about what others have, to remove the competition among your friends, and to view money as a tool to help you live a better life, not just to buy stuff.
4. Start to Shop Smarter
When you are shopping, be smarter about your approach. You can still get and buy things you enjoy, but still live within your means. Use cash back apps to save money on purchase/ Starting looking for deals or comparison shopping.
5. Build Your Income
One of the best ways to easily live within your means is by building your income. However, the second aspect to this is that you must ensure you do not increase your spending habits dramatically. Many times as people increase their income, so do their wants like a bigger home, luxurious cars, and just more frivolous spending overall.
6. Cutback On Things You Can live Without
I like the idea of cutting back aggressively on things that do not matter to you or that you can live without. This lets you spend on things that bring you some joy, but save money on things you realized never really mattered that much.
7. Have A Treat Yourself Day
Instead of spending at random times or whenever you want, set dedicated times where you can have fun. Maybe it’s once a month, every other, or however you want to set your splurging timeframes.
You can use these times to get excited and spend the day doing things you enjoy spending money on. This way you still get to experience spending money on fun things, but improve your financial well-being at the same time.