Learning to live within your means is one of the biggest challenges anybody can overcome. Before we left teaching, we mapped out a plan to ensure we could do this. Because there’s so many credit cards flying around and loans that are so easy to access, it’s almost impossible to look at what you’ve got and to live within in a predetermined amount.
But the great thing about living within your means is that it forces you to look in the mirror. It makes you think about how to eat better and to understand what purchases are essential in comparison to the ones that you think you need. But how can we learn to live within our means successfully?
Get To A Base Level
You may have very specific goals in mind, especially if you’re saving for something, but a good place to begin is to get rid of all the extraneous aspects of your life. While this can mean figuring out ways to become more minimalist it can also give you an initial cash boost because you are getting rid of numerous items in your life. For example, if you’ve got a lot of junk at home, you can get cash for phones, old CDs, and so on. And this means that you can look at living a more comfortable life with a tiny investment upfront. But getting to a base level where you are able to understand your financial situation will give you more clarity. Because if you live a lifestyle that is beyond your means, you’ve got to whittle it down to the bare basics first.
Understanding How Much You Make
It’s amazing how many people don’t have the first clue of how much they earn. The most important thing to get into your head is that the right habits are only worth embedding at the outset. Once you start to get into specific habits in terms of saving money or checking your bank balance, you have a lot more information at your fingertips. Lots of people don’t bother checking their bank balance because they set up direct debits, so when they go to the shops to buy extra things they don’t realise this is having a devastating impact on their finances. Look at your payslips and look at what goes into your bank account.
Look At Your Outgoings
Naturally, the other side of the coin when you have to understand your income is to examine the expenditure. Once you have a look at your outgoings you can begin to see specific patterns. You may see that you are spending too much on lifestyle perks when your credit card bills are so high. In fact, you might see a correlation between the two. Credit card bills are usually the reason we struggle to keep up with our finances. But credit cards are also the reason that we’ve got ourselves into a specific way of life. As soon as you start to understand your outgoings in comparison to your earnings, you will be able to see just what sort of mistakes you make on a regular basis.
Stop Conforming To Social Pressure
Material goods, for many, are a sign of status. If you have pressure to get the same specific material goods as your neighbours you will likely start to rely on credit cards a lot more. And one of the big problems with spending on credit is that it is very fulfilling in a psychological sense. We love buying nice things! The big problem with this is that it comes back to bite us later on. The major issue in doing this is that it only provides a short-term sense of fulfillment. So in order to get that feeling back, we buy more items. And as interest is added to your credit cards, you are going to pay a lot more for the items.
Changing Your Lifestyle
Living within your means can be a massive shock to the system when you don’t check your bank balance and have numerous credit cards. For so many people, changing their lifestyle is for the benefit of a short-term or long-term goal, for example, those people who live in generation rent and want to buy a house will have a goal to work towards. For those people that need to save money, it’s about making little lifestyle changes that will go a long way. A very common example is not relying on buying coffee every morning on the way into the office, as well as buying cheaper brands. These little things can seem like a shock but they can also make us think that we are failing in life. This is not the case at all. And we have to remember that the vast majority of people we know weren’t born with a silver spoon in their mouth.
Looking Towards The Future, Not Just The Now
Possibly the biggest motivator to living within your means is to understand how much you have prepared for your later years. If you are one of those people that thinks about money as something that you can’t take with you when you’re gone, this should be something you shouldn’t live by religiously. It’s great to treat yourself on occasion but you’ve got to exert some self-control. You need things like emergency funds, and for many people, it is impossible to save in the here and now because they have numerous debt. If you want to start living a happier life, one of the best approaches is to tackle the debt you’ve got. This gives you a sense of purpose because you are paying it off, but it also helps you to set up your finances for a long and happy future.
It’s never been harder to live within our means and once we start to do this we may believe that at the outset we are depriving ourselves. But the fact of the matter is that when you look back 100 years ago credit cards didn’t exist and we had to make do with what we had in our hands. Taking the opportunity to live within our means isn’t just a lesson financially, but it can set us up for a much happier existence.
We hope you are happy now. Do let us know in the comment section below.