Living within your means is undoubtedly the most important step you can take to structure your life, achieve your financial goals, and secure your future.
While living it might not be easy, especially if your income is tight, you can certainly do it if you are financially disciplined and persistent enough.
Here are six prudent suggestions that can help you get your spending under control and live within your means.
Track your expenses
How much do you actually spend every month? What do you spend it on? How much of it is unwanted or unnecessary spending?
These are things you need to find out before you can take control of your finances.
Depending on your preference, you can do it the old-school way using a pen and a paper, an online spreadsheet, or by using an expense tracker app.
Limit the use of credit cards
Use your credit cards sparingly and when you do, make sure you pay off the entire balance every month.
According to financial experts, you should ideally never utilize more than 30% of your total credit limit at any given point. This will help ensure that your utilization rate does not adversely impact your credit score at any given time.
Renegotiate your recurring expenses
Contact your service providers such as you phone, life, health, and auto insurance, credit card, student loan, and others and try to renegotiate a better rate.
Do not be apologetic or worry about looking cheap. More often than not, you might be able to get a better deal from your service provider if you are persistent enough.
Lower your living expenses
Did you know that dining out can be five times more expensive than cooking your own meals at home?
If you regularly dine out or orders from restaurants, you can save hundreds of dollars a month by cooking your own meals.
Apart from this, you can also lower your living expenses significantly by shopping at thrift stores, using coupons and cash back apps while shopping, buying non-branded items, cutting cable costs, and canceling your non-essential subscriptions.
Spend less money on gas
If you are struggling to live within your means, consider when the monthly gas bill is deeply denting your budget.
If yes, then using your car as the sole means of transportation might not be a smart idea. Try to walk and bike whenever you can. It can not only help you save money, but can also help you stay in shape.
Similarly, use public transportation whenever possible and take fewer road trips to save as much money as you can on gas.
Do not give in to peer pressure
Comparing yourself to others, especially those who lead an extravagant lifestyle, is one of the worst mistakes you can make.
You can be truly happy only if your spending habits and financial goals are aligned with your values.
Similarly, do not give in to the fear of missing out (FOMO) and waste your money on things you do not really need. There is no need to buy the latest iPhone or throw a lavish party for your birthday just because someone in your social circle does so.
Stop worrying about what others might think of you and focus on your own financial goals and objectives.