It’s never too late to create a budget that helps you live below your means. As I witness more and more people around me getting laid off, it’s scary to hear about the situations they find themselves in. Very little savings, and no current job in site. Yikes!
I am a huge proponent of not only living within your means, but actually living below your means. Basically, spending less than you make every single month. Know that you have more money coming in than going out. If your paychecks cover all your expenses and then some, you are doing a great job of living below your means.
Here are a few tips that I’ve developed over the years to live below my means and start saving more:
- Be aggressive early. Increase your savings now by always paying yourself first. When you “pay” yourself, you are contributing to your future – emergency savings, a vacation, a house, or retirement. Make it part of your monthly budget!
- Cut or reduce material spending. Little luxuries and conveniences can add up quick. When you start to look at how much you are spending on the little things like coffee, energy drinks, vending machines, clothes, and other impulse or routine purchases, you will be surprised at how much it all adds up to.
- Proactively monitor your cash flows. Stay on top of tracking your income and expenses every month. For some people, putting those numbers on a graph can be really telling and literally put the picture in your head of the excess you are spending versus saving. When you start to see how much you spend on drinks with friends, daily lunches, or weekly shopping trips, you will become more conscious of every day spending.
- Pay down debt. Start with the debt with the highest interest, like credit card debt. Interest payments only impact your bottom line, so the faster you can eliminate high interest debt, the quicker you can eliminate all your debt. Debt can quickly become overwhelming, but you need to strike a balance between paying down debt and saving.
These are just a few of the ways you can start to think about living below your means. Stop overspending and start saving. It’s a simple concept, yet one far too many people simply choose to ignore. When you create healthy financial habits and plan for your future, you will soon find out much healthier your entire life will become. Less stress, more energy, and increased happiness are the by-products of healthy habits.
Create a life today that your future self will thank you for.