Learn to live within your means

Source: The Hitavada      Date: 19 Jun 2017 12:59:31


 

I f you know how to live within your means, and find joy in it, well then, you have attained ‘financial nirvana’. Pat yourself on the back – you’re amazing! One of the biggest perks of living within your means is leading a happy, stress-free life. Imagine waking up every day without having to worry about how you are going to pay your bills. So, let’s give this a shot, shall we? Sure, it’s going to be tough to step out of your life of excess, but hey, once you get the hang of it you’ll love it. Perhaps your family and friends will get inspired and give you a real-life ‘like’ and ‘follow’.

How about that? So before we get to how you can manage your finances, here is a list of some of the benefits of living within your means: Debt Free: This is amazing! If you live within your means, you’ll always have enough money to pay for your expenses. This means no borrowing and hence no worrying about repayment. When you spend more than what you earn you’ll need to take a loan to cover the deficit. Firstly, you don’t have money to pay for your expenses and now you have to repay your loan as well. So learn to live within your means and you won’t have to beg, borrow or steal for silly expenses.

A Penny Saved Is A Penny Earned: You know it’s important to save for the future, for the rainy days, retirement, etc., and yet you continue to spend like you own a magical money-giving tree in your backyard. You cannot have grand plans for the future if you are careless in your present. Want that fancy ride or that landscaped villa? Won’t happen if you don’t start living within your means now. If you don’t have plans for your future, then make them now. Without a plan, your future looks bleak, my friend.

Less Drama At Home Over The Budget: Financial problem is the most common cause of fight in most homes. It has even lead to divorces in quite a few cases. But if there is no financial worry then it’s one big drama off your head. If you are stress-free, you can spend quality time with your family.

Talking about money problems isn’t fun, spending time with family is! What Are Financial Emergencies? For people who live beyond their means, every day is a financial emergency. If you are living within, it means you have carefully channelled money into the right area – savings and investments.

Hence, you are prepared for all contingencies. If at all there is an emergency, you are all kitted out. Such a deep sense of satisfaction, isn’t it! More Disposable Income: Living within your means doesn’t mean that you give up on all the fun in life. In fact with the basics covered you have more money to spend on entertainment and fun. Moreover, you don’t even need to dip into your savings for it. Now wouldn’t you want that? With that said, let’s look at how you can live within your means.

Income Pattern: What’s your monthly take home? Do you draw a fixed salary or a variable one? If it’s variable, check your bank statement and draw an average. Let this serve as your baseline. Come what may, take an oath never to let the expenditure cross your take-home salary. In fact set a threshold below your take-home salary.

Let’s say 50-60% of your take home is all you get to spend in a month. Study Your Spending: A little time-traveling needed here. Go back in time and study your expenditure over the last few months. See when do your many bills trickle in? Electricity, internet, phone. And what is your average? Knowing about your fixed expenses will tell you exactly where you need to eliminate costs. Delete: After analysing all your fixed costs, get down to hacking it.

Be ruthless. Once you have analysed your financial data, a lot many weak points will spring up. You’ll be shocked to learn that you waste so much in a month without even knowing about it. Put a stop to it right there. It’s one of the biggest steps of living within your means.

Economise: The second important step after deleting careless and wasteful expenditure is economising. Think twice before you purchase anything. Is this the best deal you can get? You can get amazing deals on groceries and toiletries. Check out new stores near your area. You might be in for a surprise in terms of cost saving. Check online stores. They sometimes beat retail stores in terms of prices.

Keep A Diary: Research says, people who keep a diary are better money managers. It indeed makes sense. Keeping a record of your daily expenditure will tell you just how much you have spent and how much is left in your bank account. This will allow you to tighten the reins on spending at the right time, before it’s all too late.

This is also a good way of studying what percentage of your money goes into paying for the essentials and how much goes into ‘fun’ spending. Use your diary to keep a track of everything. Regular Review: Take time out once a week to review you expenditure. Without a review you won’t know when and how you crossed your baseline.

To live within your means, you need to be mindful of every penny you spend. Another thing you can do is break up the total amount you’ll be spending in a month into four instalments. Now use one instalment per week to take care of our expenses. Keep only a week’s worth of money with you, not more.

This will keep you restricted to your budget. So, living within your means is not all that grim as it first appears. Take it as a challenge and dare yourself to beat it. But put in the effort and don’t give up no matter how impossible it might seem. Once you get the hang of it, living within your means will come naturally to you. All the best!