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How to Comfortably and Successfully Live Within Your Means

How to Comfortably and Successfully Live Within Your Means

With millions of Americans struggling to find financial freedom, discover simple ways to comfortably live within your means.

Financial freedom is a big goal for most Americans these days, but there always seems to be a dozen things in the way.

When it comes to gaining that financial freedom, the best thing you have control over is finding a way to live within your means. What does this mean? How do you do it?

Today we’ll cover a quick and simple guide on how best to live a comfortable and successful life well within your means.

Quality Ways to Live Within Your Means

Frugality is a learned skill. To pull it off you need to have a firm grasp of your financial limits, your financial ability, and the little tricks to manage both.

There are many ways to go about living within your means. Often you will need a bit of each strategy to make it work for you. Take these strategies to heart and think about how the basic concepts can mold to the specifics that fit your life.

Track Your Expenses and Know Your Income

The first major step towards any financial understanding is to track all the numbers involved. You can boil down your finances into two categories: income and expenses.

Your income is all your sources of money. Your job is often a big part of that but doesn’t have to be the only source. This could be side jobs, freelance work, even selling off items you don’t use.

Be careful of recurring income versus one-time income. Getting your taxes back or doing a garage sale is one-time income. You can’t do this every month, so it should not factor into your budget.

Items like payday advances or personal loans can help out with big one-time expenses, but shouldn’t be a constant way to up your income.

Next, calculate your expenses. Your rent, utilities, groceries, entertainment. If things are going well, your usual expenses should be less than your usual income.

Keep a constant tab on these numbers. While a steady job and steady rent will keep things constant, the numbers may fluctuate. Keep an eye on them fluctuating out of control.

What You Need In Life

To get a grip on your expenses, the biggest hurdle for many is separating out a want from a need. To live within your means, you may need to look at what you need in life and consider trimming down the rest.

The wants in your life are items you should consider cutting back on when your expenses get too high.

1. Determine a Want From a Need

The difference between wants and needs often boils down to tiers of usefulness. Not everything is a cut or dry yes or no, so you need layers to showcase how each item fits.

The absolute needs are food, shelter, clothing, and any absolute requirements of your livelihood. That means a way to get to work, as well as items for work.

The next level is useful items, but nothing you can’t find a way to live without. This often includes items of convenience. If your apartment comes with a stove but not a microwave, then a microwave isn’t a needed addition.

The last level is more in the want category. These are items of entertainment or comfort. You don’t need a TV or game system, so they fit into the want category.

A big thing to keep in mind is that wants and needs have a lot of variables and can change from person to person. If you are in a place of extreme heat, then an air conditioning unit can go from a convenience to a definite need.

2. Don’t Compete

It can be easy to put wants in as needs when everyone else has them. The best advice in this situation is to ignore what others have and focus on what benefits you.

Build yourself up in a smart manner instead of throwing yourself forward to keep up.

Cash Makes Overspending Harder

Now that the basics are down, here are a few tips to balance out your income and expenses.

Use cash for as many purchases as you can. This is best for when you are out shopping. You can keep only a certain amount on you and this can force you to not overspend. You can’t spend what you don’t have.

Your Savings In Mind

Always keep an eye out or a way to save money.

When grocery shopping, take a bit of time to cut out coupons. As well, look for store brand versions of your groceries. Most store brands are identical to name brands.

When in doubt, cook at home. From coffee to a meal, getting food items outside of a grocery trip can rack up a lot of little expenses.

When you can, look for second-hand stores. There are a lot of items that are almost new in thrift stores.

You can also commute to work or take the bus, which can save tons on car payments and insurance.

Emergency Funds

As you build up stability, look towards keep an emergency fund at all times. You will never know when something bad will happen. Your car can break down, you may become ill, or you may need time off work for family matters.

No matter what happens in life, prepare for the worst. It is best to have about 3 months of expenses in an expense fund. Keep it separate and only access it when you have to.

Increasing Income

Cutting costs is one thing. Everyone can buy cheaper stuff or cut out frivolities. The best way to cover your expenses, though, is to increase your income.

This may sound like oversimplifying it, but it may be easier than you think. Working for a raise or bonus at work is nice, but picking up a few odd jobs can be easy.

Any extra bit of cash can go a long way. Donating plasma, picking up more hours, or starting a side business can all help add a few bits of financial padding to your pockets.

When it comes down to it, if your job is also not giving you the money you need, do what you can and look for another job that will treat you well.

What Does Means Really Mean

In the end, living within your means is straight forward, but filled with little details to micromanage. In the chaos and the stress, always remember one thing: living within your means does not mean you have to suffer.

If you have a nice, balanced budget but are a nervous wreck with no entertainment or time to live, then what was it all for?

Trim the excess but remember that happiness is a thing worthy of a space in your budget. Take time for entertainment, for friends and family, and for yourself. The sanity will be well worth the expense.

Solid Financial Security

With a bit of persistence, and following this nifty guide, being able to live within your means seems closer than ever. Time to put this knowledge into practice.

From handy guides towards solid financial numbers, First Financial has everything you need to get ahead. Need more information? Contact us today!

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