Living Within Your Means Successfully

Being responsible with your finances is something that is really important in life. Living within our means is something that means that you don’t spend more than you earn. This can sound really simple, right? But if it was that simple, then why are many households paying off loans and credit card debts? It can definitely be easier said than done.

Credit cards, loans, and having an emergency fund can help us to buy more and get more than we might be able to normally. Unfortunately, that kind of mindset and lifestyle isn’t one that is really conducive to living in a sustainable way. If you don’t take control, then in the worst case scenario it could lead to something like bankruptcy. You could see for more information around that, but this post can help to get you on the right track too. At some point along the line, it will all catch up with you and become too much. Living within your means, or really below your means, will help you to avoid high-interest rates, unnecessary debts, and help you to be on the road to financial freedom.

Know your income

If you want to control your finances and be in control, then you need to know what your means are. That is all about knowing exactly what your income is, whether that is yours alone, a combined family income, or yours with a partner. Checking paychecks is a good place to start, and remember to look at net income, as that is what is actually yours to spend. You should check your payday dates too, so that they align with the dates that you have to pay bills. A lot of banks and utility companies are flexible when your payments are taken, so these can easily be adjusted so you don’t go into your overdraft or have payments bounce back.

Spend Less

As soon as you know how much income you have, you can focus on reducing that to be able to live within your means. Having a budget is a great place to start, as you can assess what you earn, as well as the necessities that you have to spend, such as bills and groceries. Make a budget a stick to it! If you’re not sure where to start with creating a budget, then this could help: It may need some changes from time to time, and there will be times like the holidays where you may naturally need to spend more. But sticking to the budget all year round will make a big difference, and help you to put money aside for the times when you will have to spend more.

Stop Relying on Credit Cards

If you are in the habit of relying on credit cards to pay for things when you’re short, then it is a habit that you need to get out of. When you make your budget, rule out the use of credit cards completely. If you’re tempted, cut them up. Credit cards are unreliable as the bank could easily increase the interest or lower your credit limit at any time.

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