3 Tips for Living Well Beneath Your Means

Contrary to popular opinion, the key to financial freedom isn’t solely based on the amount of money you bring into the household each month. It’s about learning how to manage your money and prioritize your spending. This is also known as living beneath your means.

Below, you’ll find some great suggestions for living beneath your means in order to build savings. You won’t have to move into a shoebox or completely forgo entertainment and shopping – but the tips below will help you learn how to make better spending choices.

Consider these strategies:

1. Have a slice of humble pie. If you’re constantly in a competition with your neighbors, coworkers or friends, you’re never going to stop spending. In the back of your mind, you’ll always try to “beat” them by having the newest car, biggest house, most expensive clothing, and more.

• Once you eject the competitiveness from your mind, you’ll be able to effectively trim the fat from your budget.

• If you’re a smoker, now is the time to quit. If not for your health, do it for your financial future. In some states, a pack of cigarettes can cost $10. If you’re a pack-per-day smoker, you can save $300 per month by ditching this harmful habit.

• Work with what you have. There’s no need to upgrade your car if the one you’re driving now gets you from point A to point B. If your current home isn’t to your liking, make some updates or redecorate – it’s a far less expensive fix than purchasing an extravagant estate.

    2. Trim your grocery budget. Coupons aren’t the only way to save money on your grocery bills (though they certainly help). You just need to be conscious of your purchases. It’s possible to feed a family of four for under $10 – with a high quality meal to boot!

    • Never go grocery shopping hungry or tired.

    • Three nights per week, cook up something very inexpensive for dinner, such as beans and rice or homemade soup. It’ll be a nice change of pace, without feeling deprived. And of course, the biggest bonus is that you’ll save money!

    3. Make savings a priority. Savings isn’t optional. It’s necessary for financial emergencies – and they always come up in some form or another. Treat it as any other bill each month. Place this, as every other bill, in your budget workbook. You do have a budget workbook, don’t you?

    • If you’d like, break it up into pay periods. In order to save $800 per month in a 2-income household, each partner would have to set aside $100 per week. A $400 goal would be just $50 per week. When a savings goal is broken into manageable pieces, it’s a far less daunting figure.

    • When you’re unable to meet your savings goals, either find a way to make more money or spend less money each month. If you’re able to trim the fat from your monthly expenses, there will always be a way to meet your savings goals.

    • Budget your “fun money” as well. When you budget a set amount for unnecessary shopping trips and entertainment, you can’t shop until you drop. When the money runs out, you’re done.

      Your entire life doesn’t need to change in order to live below your means. It’s all about minimizing your expenses where possible and refusing the urge to live larger – even if you have the means to do so. By implementing these simple tips, you can slash hundreds of dollars – if not more – off your monthly bills and stash it into your savings account!

       

      Paying Off Debt in the New Year

      Having debt is like carrying a huge boulder on your shoulders. Each time you finance another purchase or swipe your credit card, you’re adding weight to that boulder.

      Let this year be the year of removing that boulder from your shoulders so you can live joyfully in the realm of financial freedom.

      You can pay down your debt this year, whether your debt amounts to $3,000 or even $30,000. The single most effective way to do so is by creating an income stream and dedicating all of its earnings towards paying down your debt.

      Yes, you may need to temporarily add quite a few hours to your workweek, but one year of long hours can lead to a life free of the many burdens of debt. Can you imagine what it would be like not having to make debt payments? Your paycheck would be yours to do with as you please!

      Getting a Part-Time Job

      If you have the ability to get a moderate to well-paying part time job, go for it! If you’re able to land a 20-hour per week part time gig paying just $12 per hour, that’s over $1,000 each month. Granted, you’ll inevitably need to pay taxes on this income, but even so, you’re able to keep about $945 in your pocket by the end of each month.

      Over the course of a year, you’ll be able to devote over $11,300 to your debt. Surely, that’ll remove a heavy boulder from your shoulders! And if your spouse is willing to get a part time job with the same pay, you’ll be able to pay off your debt in the following amounts.

      Total Debt Paid Off With Two Additional Part Time Incomes:

      Month             Debt Paid Off

      1                      $1,890

      3                      $5,680

      6                      $11,340

      9                      $17,010

      12                    $22,680

      How drastically would your life change if you were able to pay off over $20,000 worth of debt? Better yet, if you choose to keep the job even after you’re done paying off debt, you’ll be able to build a hefty savings account to protect yourself from ever needing to borrow money from lenders in the future.

      Capitalizing on Your Hobby

      Everyone has a hobby. Unless your hobby is habitual shopping, chances are you’ll be able to capitalize on indulging in your hobby. You can flip furniture, sell knitted items, profit with sporting gear, or even sell your homegrown vegetables.

      If you’re talented in repainting furniture, purchase used furniture for pennies on the dime at craigslist.org, yard sales, or a local thrift shop. Then, sand the piece, prime it, paint it with two coats of glossy white paint, apply a protective coat, change the hardware and then list it back on craigslist.org for sale.

      If you purchased the piece for $25, spent an extra $20 on supplies and are able to flip it for $150, you’ve made a $105 profit with just a few hours of work! When you become accustomed to the process, you may be able to flip 3 pieces of furniture per week and end up with a nice $1,260 profit. Not bad for indulging in a hobby you enjoy!

      While you may not be the Picasso of cabinet refurbishing, you may have another hobby. Below are 7 common hobbies that are easy to capitalize on.

      • Knitting/sewing
      • Cooking/baking
      • Babysitting
      • Painting
      • Flipping collectibles
      • Writing
      • Party planning

      There’s no need to downsize, or even adjust your lifestyle in order to pay off your debt. You’ve worked hard to build everything you currently have; why give it up now? Getting a part time job or effectively monetizing your hobby will allow you to pay down your debt considerably this year so you can start living the debt-free life you deserve!