Live within your means – Spend Less than you Earn
Filed under: Debt — Sabine @ 7:29 pm
What does it mean to “live within your means without debt”?
Living within your means signifies being on top of your finances
It means knowing at the drop of a hat exactly how much you can afford.
Knowing how much you have and how much you can spent, means not waking up in the middle of the night and wondering how to pay off the credit card bills.
It means knowing exactly what you can afford and what not. It also means much less stress
Secrets to living within your means without debt :
These are not really secrets-most people who are debt-free or serious about becoming debt-free can find these out for themselves. The true secret is to live below your means. That is, spend less than you make. A lot less. How can you do this? Try to attack the problem from the angle that you already know needs attention. For instance, if you are a shopaholic, work on curbing your shopping sprees by making a written list of only the items you need before stepping out the door. Cross off each item as you shop. Also, consolidate all of your shopping needs into one trip, rather than smaller shopping trips spread throughout the week. Always buy the store brand, which is usually just as good as the name brand and a lot cheaper.
Spend less than you earn
This is a simply mantra that you should adopt in your quest to live within your means without debt: spend less than you earn. It really is that simple. Most of us, however, do the exact opposite.
Spending less than you earn means you have to sit down and face the cold hard facts of your current financial template. Sit down and do some simple math: how much gross income do you take in a month? Next, subtract how much you need for life essentials. Life essentials include putting a roof over your head, food in your body and clothes on your back. Some financial gurus have come up with specific numbers on how you should ideally be spending your money each month.
How are you spending your money?
Roughly 10 % of your monthly income should be directed into a savings account. – no matter how little or much these 10% are!
Study your numbers
Now that you have the numbers, do the math and see how your monthly spending stands up.
Are you splurging on your entertainment budget or spending half your income on shopping sprees? Are you paying off enough debt each month to really make a dent on those credit cards, or are you merely paying off interest?
Are you saving anything for emergencies and the future?
These can be hard questions to answer, especially if you have a sinking feeling that the answer is a resounding “no” on all accounts. But this is also a very important step to take if you are serious about living within your means without debt
More Information on Eliminating Debt