How to Live Within Your Means

The consumerist society that we live in today just wants us to spend, spend and spend, this leads us to live beyond our means and live a lifestyle that our income is unable to support and sustain.

It is so easy to just buy the things we can’t afford because we have access to things like credit cards and other forms of lending. 

Clothing retailers now offer the option of paying for our purchases at a later date, companies are just finding new ways for us to become even more immersed into the instant gratification and impulsive nature that so many of us have become prey to.

This lack of control over our spending has caused so many financial problems as well as affecting other parts of our lives: relationships, friendships, our self worth and so much more.

Living within your means makes you more disciplined as well as making you realise what is more important to you. We have to break away from this mindless spending that so many of us engage in- being more mindful about what we spend our hard earned cash on will benefit us in countless ways:

Leave us with more money each month to put towards goals we want to achieve as well as things that matter more

Make us more aware of what actually makes us happy spending our money on

Increase your self-worth because items of possessions no longer determine anything about you

Make your relationships more meaningful because you no longer feel like you’re in competition with your friends and others around you, seeing others with things you don’t have will no longer make you feel less than or upset because you are more mindful about what you want to spend your money on

Stress-free life, you’re no longer worrying about making payments on your loans that you can’t afford and will hang over your head for years just pilling on

The list above just gives you an idea of few of the things that will make your life easier and happier, spending less money than you make will give you back control, become more disciplined and make better decisions for yourself.

Top ways to bring your spending back down to where it is below what you bring in each month is to:

1.   Budget

Budgeting gets a really bad rep because so many people see it as something that takes up too much time and enforces a scarcity mindset, however a budget is something that gives you control over your finances. 

As humans we plan everything from our vacations, to our daily, weekly schedule and even our life so why is planning what to do with our money each month a negative thing. 

Having a budget gives you more freedom to spend money on things you enjoy, if you don’t know what those things are then it allows you to experiment by allocating money to different categories. 

By budgeting your income each month and sticking to it, you can regularly put aside money towards things that you want to do and buy. It can make life a lot less stressful than if you were just spending as you go along without knowing how much money you’re spending and what you have in the bank.

Budgeting gives you more structure and helps you to know your limits, it’s not a punishment rather it should be considered something that every responsible and mature adult does. 

2.  Use only one card or use cash

To help you to stick to your budget and keep your spending to a certain limit it really helps to either stick to one card that you can move a set amount of money into from your main bank account each month and that is all the money you have to use that month. 

Or you can consider using just cash, using cash makes it more harder to spend as you have to let go of that cash and when you see the cash getting less and less by the end of the month it makes you more careful and smart with your purchases.

However, using cash can be a little inconvenient as you are unable to use it for online shopping and paying bills which are mostly paid through a direct debit. Also, it can be difficult to keep it safe.

You can try doing both and see what works best for you, give yourself a set amount of money each month either by transferring it over to one card you’re going to use for the whole month or by withdrawing a set amount of cash to last you for the month. Limiting how much money you have to play around with makes it easier to spend less than you earn as you don’t have access to it all.

3.  Put money into savings first

If you immediately put a set amount of money into savings as soon as you get paid either through an automatic transfer you have set up or by doing it manually then you reduce the amount of money that you have available to spend which leads you to spending less than what you make.

This may not be effective if you use a credit card for your purchases as those can have limits higher than what you have left in your bank account after putting some in savings. 

It might be a good idea to first just use your checking account for your spending so you get accustomed to using the amount of money you’ve allocated then once you’ve gained a bit of control and discipline you can move to using the credit card.

This tip shows you how important it is to have a budget because without one you don’t know how much you can afford to save each month, a budget will show you how much you need for your bills, food and then some for personal spending.

4.  Track Your Spending

For a month just track what you spend money on and record it, you can do this by keeping receipts for the whole month or by using only one card for everything and look at your statement to see what you spent your money on.

Doing this will let you see how much you spend on what then you can go about setting limits for each spending category and using a budget will help you to control your spending in certain areas.

Tracking what you spend each month is a good way to let yourself see what you spend and to ask whether it makes much difference in your life and what would happen if you were to reduce it.

5.  Do mini challenges

One thing you can do by tracking your spending is to do mini challenges to make saving money and reducing your spending fun. You can do weekly challenges where you challenge yourself to cut one thing out of your budget e.g no eating out, or no buying lunch at work, or no takeaway, or no to getting your nails done that week. Whatever it is just cut one thing out for a week and the money you would have spend put either in savings or throw towards debt if you have any. 

Another idea could be to do monthly challenges where you cut one monthly expense out such as stopping your gym membership for a month and again put that money into savings or towards debt, other ideas could be to cut out a TV membership plan like Netflix or whatever else you use. 

These monthly or weekly challenges are fun ways to just pick one thing you can cut out for a week or a month and to just save a bit of money or pay down some debt, you’re not completely removing it just reducing how much you spend on a certain activity.

If you don’t want to completely cut it out then consider reducing your spending on it so if you buy lunch at work everyday, only buy it 2x that week and put the money for the other 3 days into savings. Do small things here and there that help you to move towards a lifestyle where it is easier for you to live within your means.  

6.  Downgrade Your Lifestyle

It’s all well and good cutting back on the variable categories in your budget but it’s the big ticket items in your monthly expenses that eat the majority of your income. Reducing those big expenses can bring your monthly expenses below your monthly income.

Rent is usually the biggest expense, try reducing your rent by either having a room-mate to split the rent with or once your agreement is over shop around for the lowest rent you can get with a place that meets your requirement. You might have to make sacrifices for example shifting into a smaller place or a place further away so that you can reduce how much you spend on rent.

Transport is another big cost- again with this one run numbers on how much it costs on public transport and if you could walk to where you need to go instead of using a car. You could even consider buying a bike and using that as your travel medium. Consider other alternatives and look at the numbers to see what the savings looks like if you reduced travelling by car. 

Get in touch with your service providers to see if they could knock off anything on your bill and always shop around for prices at the time of your renewal since many service providers we are bound to for a year. Instead of renewing with the same service provider which can cost you more, take the time to look around for what’s the cheapest price being offered for the services you require.

By making reductions in how much of your income goes towards the fixed expenses: rent, transport, utilities and services you pay for on a yearly basis e.g car insurance you could save a lot more money than cutting back on the more smaller expenses such as coffee. It still adds up no matter how little you save but the savings on these kinds of expenses can be much more significant.

That’s all for today’s list, I hope that this was helpful. If you have any tips then I’d love to hear about them. Leave some of your experiences of trying to bring your expenses below your income.