Tips For Living Within Your Means
It’s easier said than done to live within your means; in other words only spend as much as you have coming in each month. Many of us spend more than we should with credit cards, and dipping into emergency funds and savings accounts. If that sounds like you, these tips for living within your means can help.
Your first step is to determine how much money you have coming in, how much you spend each week or each month and where that money goes – this is called a budget. Your challenge is then to find areas in which you can save so you aren’t spending more than you have coming in and these steps can help.
1) Determine Your Needs and Wants
Look at your overall financial situation and lifestyle, and try to determine whether you are spending money on needs or wants. Once you have a list of items, you should ask yourself whether your life would be different if you had this item, whether the item matches your values, and how things would be different if you didn’t have the item.
2) Establish Guidelines
Your revised budget should be set based on how much you spend on different things, how much you have to spend on necessities such as rent and utilities, and whether these things are really needs or wants.
3) Track, Trim and Target
It’s easy to see where you may be able to trim expenses once you start tracking where your money is going each month. You may find that you are spending more than you realize on eating out, for example. Once you have a better idea of where your money goes, it is easier to start cutting back rather than eliminate things completely.
It can help you to use the SMART goal:
- Your goal of saving should be SPECIFIC; not just save money, but save it for that trip to Paris next summer.
- Your savings plan should be something you can MEASURE so you know how close to your goal you are.
- Be realistic when it comes to devising a savings plan. Only save what you can actually afford to save; in other words your goal should be ATTAINABLE.
- RELEVANT. Have a savings plan and goal that actually make sense.
- TIME RELATED. Set yourself a realistic time by which you will have the money saved up.
If you are like most people, money is probably tight. However, with some perseverance it really is possible to establish a budget, come up with a realistic savings plan and save for that dream vacation, new furniture or new car.
Many people in West Australia have benefited from the advice and expertise of Precept Financial Services, and we can help you too. You too can have the confidence, freedom and power that comes from understanding your own financial situation, creating a budget that works for you and saving money towards a specific goal.
To see how we can help you, contact us today. It’s never too late to start working towards a more secure future.
Any advice in the article is general in nature and does not take into account your personal circumstances, objectives and needs. Therefore, before making a decision, you should consider the appropriateness of the advice with regard to those matters.
Please see our Financial Services Guide for more information.