Three Great Tips for Living Below Your Means
You may not believe this, but financial freedom is not solely based on how much money you bring into the house every month.
Financial freedom is about prioritizing your spending and learning how to manage your money better.
This is known as living within or even below your means.
We’ve compiled some great suggestions on how to live beneath your means in order to build more savings.
No, you don’t have to move into a house the size of a postage stamp or give up every bit of shopping or entertainment expense, but these tips will teach you how to make better spending choices for more disposable income.
A bit of humble pie, anyone?
As they say, keeping up with the Jones’ will put you in the poor house.
If you’re always competing with coworkers, neighbors, and friends for the newest, best, and most exclusive “stuff,” you’re spending spree will never end.
You don’t have to have the biggest house, most expensive clothing, biggest house, or the newest car to be considered a success. Turn down the competition, turn up the savings.
- The urge to be competitive is something you create; it’s not a requirement of living in the 21st century. Once you’ve quashed this mindset, you’ll be trimming a significant amount of excess fat from your budget.
- Still smoking? Quit now, while you’re ahead, for your health and your financial future. Some states now require $10 for a single pack of cigarettes – ouch, that hurts your wallet. If you’re still smoking a pack a day, think of the extra $300 a month you can earn just by kicking the habit.
- Make do with what you have. If the car you’re driving still gets you from point A to point B, you’re ahead of the game. Don’t make a vanity upgrade to keep pace with the world in debt. If your current home doesn’t suit you as it once did, make some renovations or add a few inexpensive items that gives it the facelift it deserves. It’s much less expensive to fix up what you’ve got than to introduce new debt with a new home purchase.
Trim down your grocery bills
Coupons are great, but they’re not the most significant way to save money at the supermarket. You really have to be conscious of what you buy, and why.
For example, there are still high quality meals you can make for a family of four for under $10, if you put your mind to the task.
- In case you haven’t heard, don’t go grocery shopping on an empty stomach or when you’re tired. Your decision-making process is entirely different, and usually much more expensive.
- Make a commitment to being frugal at least three nights per week, keeping it simple and cheap with something like homemade soup or beans and rice. The change of pace will do you and your bank account good, without feeling like you’re giving up the farm. Saving money will become an appetizing habit you’ll be willing to handle.
Make saving money a priority, not an option
Someday, that financial emergency will surface, and if you’ve been saving for that rainy day, you’ll be better prepared for the storm. Put aside money each month as if it was just another bill. In fact, make it part of your budget (if you have one, which we sincerely hope you do).
- Break your savings commitment up to match your pay periods. If you’re looking to save $800 per month in a house with two incomes, each partner sets aside $100 per week. Need $400 a month in savings? That’s only $50 a week. This bite-size approach makes your savings goal more manageable, and far less scary to consider.
- When you’re strapped for cash and can’t reach your savings goal, find a way to make more or spend less to make it happen anyway. Sensible trimming within your monthly budget and expenses will create opportunities you didn’t know you had.
- Don’t forget to budget in some “fun money” too, but be sensible. Having a cap on the amount you spend shopping or having fun will keep you disciplined, as long as you stop when the money runs out.
Living beneath your means doesn’t require you to change your entire life. It does, however, require a commitment to minimizing your expenses wherever possible and resisting the urge to live large, even if you can.
Implement these basic tips into your monthly financial plan and you can literally put hundreds of dollars each month into a savings account that will quickly become a source of pride for the whole family.