Living below your means is one of the financial mantras majority of financial advisers preach for everyone to live by. You can’t really argue with it seeing that it makes perfect sense. But real problems arise when you actually try to do it. Living below your means when your income is barely enough to cover your expenses is not only frustrating but also disheartening. It’s just not possible you might say and that’s true most of the time. A generous dose of willpower and some smart strategizing may help however. Below are simple, smart and foolproof ways to help you live within your means:
Change your mindset
More than the tangible steps, you need to start with your mindset in order to pull this kind of life changing goals. If you think it’s impossible to live below your means with your current income and situation, the first thing to do is work on changing that kind of mind. If you’re having a hard time doing so, maybe faking it until you make it might work. It will also help to think that your income is smaller than what it is. One trick that works for some is to think that your income is still the same before your earned a raise then live within said income and set aside the money for savings.
Pay yourself first
One way to train yourself to live below your means is to set aside a certain percentage of your income first thing. As soon as you receive paycheck, set aside 3 to 10% to another account, which you can call your savings or emergency fund account. What will make it even more effective is if you set this up as automatic. Call your bank and set up automatic transfers so you’re a step ahead to living below your means.
Set specific goals
Living below your means without any specific goals to work toward to is like running around in circles. If you want things to make sense then you need a financial goal to justify your decision to live below your means. Maybe you want to save up for a home, retirement or a vacation. Whatever it is, make sure it’s specific enough.
Make specific plans
Don’t stop with setting specific goals. In order to achieve those goals, you need to back it up with specific and realistic plans. How do you intend to save up for a home or vacation? This is one key question to ask and the answer may include making specific lists and how to’s on how to stay within budget within the week. This may also mean cutting back on some expenses, cancelling subscriptions, etc.
Pay cash for everything
While you’re still getting used to living below your means, it would be best to pay cash for everything, at least for now. Use cash when shopping or paying for your bills. This way, you’ll be able to really feel and understand how much you have to spend on expenses per month.