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Are you interested in finding ways to live within your means and still have a life?
The average person carries a lot of financial anxiety. Most people have car debt, student loans, credit card debt, and sometimes other forms of debt.
Ultimately, most people want to reach their financial goals but still have a life.
Living within your means does not mean you cannot enjoy life.
We believe budgeting is very important and everyone should have one.
Most importantly, budgeting will likely improve your financial situation and help you live within your means.
Budgets are not just for some people, it’s for all people! Regardless if you make $25,000 or $100,000 a year, you need a budget.
The easiest way to live within your means and still have a life is to budget. In general, budgeting may not be the most fun thing to do, but it’s necessary.
Let’s talk about 5 ways to help you live within your means and still have a life.
Related reading: Budgeting 101: How To Create A Budget
Avoid unnecessary purchases
It’s very easy to spend money when you don’t need to. In fact, you should only purchase what you need and avoid buying things just because they’re on sale.
Companies do a great job of advertising to consumers making them think they have to make a purchase even if they don’t need to. They’re good at taking advantage of urgency and triggering your mind to spend.
Above all, the one-time and limited offers make us feel like we may miss out on something.
After we feel like we are missing out on something, it activates our spending emotions. This creates the act of spending on impulse instead of reason
Here are some keywords to be aware of when making purchases:
- Today only, countdown, 24 hours only, etc.
- Hurry, act now, don’t wait, etc.
- Limited supply, last chance, never again, etc.
- Don’t miss out, exclusive, etc.
Cut meaningless expenses and avoid debt
A great way to live within your means is to cut expenses and avoid debt. Eliminating costs you don’t care about puts money back in your pocket.
Do you have a gym membership you’re not using? Are you eating out too much? What about a cable subscription you rarely use?
Here’s a great tip: take a few minutes to write down all of the things you care about in life. Then compare those values to things on your financial statements and determine what items can be removed and which should stay.
In fact, this will show you if your purchases match up with your values.
A great tool that we use to help save money is Trim. This tool helps you stop wasting money on services and negotiates your bills. It helps with your cable, Internet, phone, and even medical bills. Click here to check out more about Trim.
On another note, debt can create a lot of frustration when it comes to money management. Carrying balances on your high-interest credit cards is stealing away from your future.
As stated above, budgeting your finances will also help you avoid debt. Having credit cards is fine as long as you’re using them responsibly.
That means, use your credit card but pay the balance in full each month to avoid unnecessary interest. Debt does not help you build wealth. It will slow down your progress of you reaching your goals.
Purchase used cars
It’s very important to be careful purchasing new cars that lose 20% of their value the second you drive it off the lot.
More importantly, you should purchase your cars in cash and avoid having a high monthly payment.
In fact, by paying cash you will skip the stressful auto loan on top of other car ownership expenses.
Of course, it’s nice having a brand new car but you must be able to afford a new car, which means paying cash.
Used cars are highly recommended to live within your means. However, be sure to get a reliable car with low mileage and under warranty. This will save you the most money in the future so you can have money for other things in life.
We made the mistake of purchasing brand new cars using auto loans in the past. But, we will only purchase our cars in cash from now on. This saves us the most money and we control the transaction, not the dealership.
Save for vacations
Most of the time when people refer to a savings account they are talking about saving for retirement, a down payment on a house, etc.
However, it’s important to save for fun things like taking vacations with your friends or family.
It’s crucial to save for vacations so you will be able to enjoy the trip when it comes. You won’t have the stress financially wondering how you will be able to afford to go on the trip.
In fact, a trip is more enjoyable when it is all paid for in advance.
This is where a sinking fund comes into play. A sinking fund allows you to save money for a specific reason that is expected.
In today’s society, it’s very easy to automate saving money. One of our favorite resources is CIT Bank. They offer competitive interest rates and is an online-only bank. We are huge fans of online-only banks because they save money from not having a physical location and normally offer higher interest rates for consumers!
Remember, the key is to begin the habit of saving consistently regardless of the product you choose to save with.
Related reading: Sinking Funds: What They Are & Why You Need Them
Focus on what's important - live within your means
In conclusion, focus on things that bring joy to your life. Spending money shouldn’t be the main way you experience happiness.
Yes, it’s fine to spend money but you must spend within reason. Having a budget, avoiding debt, and spending strategically will help in the long run.
The people you spend time with and the memories you make are what make life special.
In fact, having a clear understanding of what is a priority in your life will remove the fear of missing out on the sales you may see online or in the store.
Living life within your means shouldn’t feel restrictive. Creating your budget gives you the freedom to spend and know what you’re spending your money on.
Spending less does not mean you’re living life in shackles. It reminds you that you’re living life financially responsible and creating a foundation for a healthy financial future!
Do you believe in living within your means? Why or why not?