Living within your means has always been a wise strategy and becomes even more important during uncertain economic times. As the saying goes, don’t hang your hat so high you can’t reach it.
Here are seven ways you can live within your means:
- Create a budget. Get familiar with your monthly income and expenses. Include automatic payments you may rarely think about, like bank fees and insurance.
- Pay down debt. Contact lenders to see if you can consolidate your debts and pay them back on more favorable terms. Avoid going into debt by saving money in advance (sinking funds) to pay for holiday gifts and weekend trips.
- Manage your credit cards. If you use credit cards, try to pay off the balance every month. If your balance has already accumulated, consolidate it onto a single card with the best rate you can find.
- Save more. Motivate yourself to save by remembering the your why, whether it’s your kid’s education or your own retirement. You may be able to deduct money from every paycheck before you even see it. This way, your savings are set aside before you have any temptation to spend them.
- Earn more. Of course, earnings are the other side of the equation. Consider any classes or certifications that could help you qualify for a more lucrative position. Make money off your talents, for example you could become a tutor.
- Remain flexible. Life isn’t static and your budget shouldn’t be either. Life events are likely to interfere with your budget from time to time. Indulge yourself occasionally or make adjustments for unusual expenses, like house repairs.
- Tackle one habit at a time. Be patient while you’re changing your old ways. For some of us, even keeping a budget is a new habit. That’s okay; just give yourself some time to integrate one change before you jump into the next big project.
Living within your means is good for your mental and financial health. Build a better future by putting yourself on a budget that you can sustain.