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There are a lot of misconceptions about what it is to live below your means. It's because people often focus on the cut backs and the lifestyle change versus the huge advantages. In this high-pressure, credit-based, keeping up with the Joneses, gotta-have-it-all-right-now society, living below your means isn't exactly fun but it is absolutely doable. Below are a few tips that can help you get started on setting some new goals to help pull you out of debt, pay bills on time and still have some change left over to live a comfortable affordable lifestyle.
• Challenge Reoccurring Expenses – Take the time to review your overall income, current bills and monthly statements. See where you might benefit from a renegotiation or an assessment of alternate options. For instance, you may be dead set on keeping your cable, but you can still call your cable company (and its competitors) to negotiate a better rate. Not to mention, streaming services like Netflix and Hulu have become a lot more popular these days and are much cheaper to have than cable. Even mundane expenses like your cellphone bill and insurance should be reassessed annually to ensure you're getting the most appropriate coverage and service for your current conditions at the best possible value.
• Cut Unnecessary Expenses – This is a lot easier than you think. Current culture teaches us to spend money on things we don't need. We go out and spend money for no other reason than to feed our egos. Buying things gives people a false sense of security as we tend to equate "having stuff" with happiness and stability. I bet if you add up the amount of money you've spent over the last 18 months on things such as takeout food, parking, gas, alcohol, and random crap you've purchased from Apple, Amazon, or eBay; you'd likely calculate an amount that could have easily been used for a down payment on your first home. Or, in the very least, enough to pay down at least 33% of your debt. It takes skill and determination to go against the tide and buck system that encourages spending but you can do it. It's all about separating your wants from your needs.
• Shop Smarter – As you re-examine your expenses and spending habits think of ways to shop smarter. Adapting a good spending plan can help you gain control of your expenses. Customize your spending habits by writing down how much you usually spend on basic needs such as food and clothing. Most of us shop and make purchases based on our personal preference so all you have to do narrow it down. Create a budget. Clothes and shoes are a necessity but they aren't necessary to purchase on a monthly basis and neither is takeout food. This alone should free up some cash that should allow you to put away some funds into your savings or pay down on some debt. Make coupons your friend. Take advantage. It's free money. When you use coupons, you'll never have to pay full price for anything going forward. You'll also began to make smarter purchases.
• Pay In Cash – I cut up my credit cards about eight years ago and have never looked back. It was one of the best financial decisions I've ever made. It isn't always easy or immediately gratifying, but adopting a pay-in-cash lifestyle versus the pay-with-credit lifestyle can save you from falling into a debt trap. Credit cards make it too easy to spend money and less able to control money we don't have. Swiping the card will have you doing a lot of unnecessary spending in the name of bringing home the latest smart phone / accessories / clothes. We don't think about what the bill will look like later. Most like to use credit cards for purposes of rewards points and tracking spending. What we don't realize is that the physical aspect of handing over cash to someone else is a lot more difficult than swiping a card. This makes you inclined to spend less and make more affordable purchases. Start paying in cash today. Make it a habit. Once you make this a habit you slowly eliminate debt and soon realize that you are actually saving more money.
If you want to live within your means and reach your financial goals, you have to track where your money's going and learn how to budget better. It's the only way to nip debt problems in the bud. The more affordable your lifestyle, the more comfortable you are. The more comfortable you are, the happier you will become.