How badly do you want to be successful? Are you ready to take the steps necessary to achieve your dreams? To launch your dreams, it is important to begin without pressure. Living within your means is a great way to begin.
What does it even mean, to “live within your means”
Living within your means refers to making financial choices that result in a lifestyle where you never have to struggle. I call it financial stability.
By living within your means, you remove the pressure that would otherwise affect your ability to grow financially, and would even affect your health.
It’s a comfortable place to be. It does not mean you are rich, but it does afford you the ability to make a plan for success, and execute it. Living within your means is a prerequisite to becoming financially successful.
You may be interested in my post on how to think like an entrepreneur
Benefits to living within your means
- Raise your credit score
- Be prepared for emergencies
- Improved physical health
- More fulfilling family life
- Set an example for your kids
- Be prepared for opportunity
7 Tips To Live Within Your Means
1) Review your income and expenses
Your first step to live within your means is to take stock of your financial condition.
Make a list of your income. Most people have only one source of income, and that’s fine (for now). Once you are living within your means, it becomes much easier to work on new sources of income (such as starting a blog) (https://scottsmoneymachines.com/how-to-start-a-blog/).
Make a list of your expenses. List your rent/mortgage, credit card payments, utilities, phone, insurance, subscriptions, car payments, fuel, maintenance, food, and all the things I did not list here. You must list everything for this to be effective. That means your cash spending as well.
If your expenses are higher than your income, you have an immediate problem that needs your attention. You must figure out how to balance your personal budget… your expenses must not exceed your income – otherwise you are growing debt and building a problem for your future.
To balance, you can either increase your income or lower your expenses – or a combination of both. There is no other viable way to do it.
I want to be clear that balancing your budget is NOT the same as living within your means… but it is a good start. To live within your mean is to have financial leeway. You cannot be at the financial edge all the time.
2) Lower your expenses
Even after you balance your budget, review your expenses and eliminate things that are wasteful.
I know this can be difficult, especially if you have to give up something you enjoy. You, and only you, must figure it out. Remember, you will feel better, and you will be in a position to develop the means for abundance and success only after you are living within your means.
3) Make a budget and stick to it
Set yourself a budget that is realistic. Cover your essentials and have a realistic budget for things that are non essential. Stick to your budget and you will soon develop positive financial habits that can take you far.
To stick within your budget, you may have to eliminate some things, or space them out so that you can comfortably afford them. If you are in debt, you may have to eliminate some things until you are out of debt.
4) Don’t use credit cards unless you pay them off each month
Credit can be helpful when used constructively. Most people use credit destructively. If you are using credit to fund non-essential things, then it is destructive. The general rule is, don’t use credit cards unless you pay them off in full each month. You will otherwise be going into debt.
5) Eat at home
Eating out can consume an awful lot of money. If you eat out, this is an easy way to lower expenses so you can live within your means. Eat out only for special occasions, and only when you can afford them. I want to point out again, that this can be temporary. Once you are living within your means, you can then work on your success. Eating out will be sweeter when you know you have earned it.
Eating at home should not be a chore. Make it fun, maybe you can learn to cook new foods, and enjoy the process.
6) Don’t live in the largest home you can afford
To live within your means, never buy or rent a home that is at the limit of what you can afford. Living on that edge is dangerous.
If you are shopping for a house to purchase, just take note that the largest mortgage you can qualify for is not a good idea. Financing a home for the most a bank will lend you is stretching beyond your means. You should choose a much more modest home. The lower your cost of housing, the quicker you could be living within your means.
7) Save 10% of your income as soon as you get paid
One of the easiest and most effective ways to live within your means, save money, and prepare for opportunity is to save 10% of your income as soon as you get paid. It may seem difficult, as you ponder how you are going to meet your financial obligations, but when you save money off the top, you’d be surprised how you figure it all out.
In other words, if you wait until all bills and expenses are paid before you save money, there is never anything left. BUT if you take 10% off the top, then pay your bills and expenses, you’d be amazed how you figured all out.
You can do it
Living within your means is the first step towards wealth. Wealth and success is attained by setting a clear goal you desire, writing a plan, lowering your expenses as far as you can, and executing your plan.
Do you have any tips you can share?
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