If you’ve just moved into a new residence, you’ll likely be facing some new expenses that you haven’t had in your past place. That’s why we’ve put together some helpful tips for living within your means after moving.
Lets face it, your overall quality of life is directly connected to your financial stability.
That doesn’t mean you need to be outrageously wealthy to have a great life, but if you find yourself struggling to meet basic financial demands, it’s likely you’re not having the greatest life you could be having. No matter the income level you currently occupy, living within your means is the right strategy for financial stability.
To put it simply, ”living within your means” is spending less money than you earn. We know that can be easier said than done but we are here to help! With this list “10 ways to live within your means”, you will be on your way to financial freedom in no time at all.
1. Make a balanced budget (Stick to it!)
This might be the single most important action you can take to achieve financial stability. A well-balanced budget is the foundation to living within your means. When used properly, It can accurately keep track of your financial situation and give you a roadmap to where all your money is going.
Here are the steps you’ll need to take to create a simple budget:
- Know your income. Since most of your bills are due monthly, you’ll need to know how much you get paid every month. If you are on salary, this is fairly easy. However, if you are part-time, freelance, a dependent or have multiple sources of income this may be slightly more difficult. Your best bet is to take an average of your monthly income for the last three months and list that number at the top of your budget.
- List your essential expenses. Dedicate a column of your budget to all of the expenses in your life that you absolutely can not live without. Expenses like your rent or mortgage payment, grocery bill, utilities, health insurance and transportation costs are all necessary for your basic survival.
- List all other expenses. This list should include everything else, from dinners out to new clothes, your morning double shot latte habit, Disney and Netflix subscriptions.. You get the idea. Every dollar you spend monthly that doesn’t lend itself to your basic survival should be listed in a separate column.
- Compare income to expenses. Add together the bottom lines from both expense columns and subtract that number from your income total at the top of your budget. How did you do?
If you are looking at a big positive number, you’re doing great! However, if the number is closer to zero, you may be surviving but with nothing left-over for savings. In the unfortunate event that number is negative, you have a serious problem on your hands and need to make some cuts in your expenditures — now!
2. Examine your expenses and make cuts
Aside from the “Essentials” column, all other expenses need to be put under a microscope for examination. Ask yourself: “Where am I spending the most money?” and “Where can I save the most money by making sacrifices?”
If you’re living in a new area, you may want to cut certain expenses like gym memberships, magazine subscriptions or other expenses tied to your last location of residence.
Most likely, you’ll notice at least one expense (if not numerous) that seems to be draining a large portion of your income. Like a small leak in a boat, over time, it could cause you to sink. It’s up to you to examine these costs and find a way to cut them down as much as possible.
3. Know the Difference Between Needs and Wants
You need shelter to live in, clothes to wear, and enough food and water to maintain your health. These are the things that are indispensable and fundamental to your survival. Everything else is negotiable.
We know you may think that you really “need” a brand new 65” OLED flat-screen TV but would you really suffer if you got the 48” or stuck with your old TV for a little bit longer, instead? Do you really need designer jeans or would you be just as happy with a cheaper pair?
Do you need to spend $100 every time you go out to dinner with your significant other or can you go somewhere slightly cheaper? Maybe even have a romantic night cooking at home instead. Realizing that you don’t actually need all of the things that you think you need, will be sure to help you live within your means.
4. Learn ways to save money
Here are some useful money saving tips and examples to help bring your budget into the green and get you living within your means:
- Eat from home as much as possible. Bring lunch to work and trade your Starbucks for home-brewed coffee in the mornings. Have picnics and dinner nights instead of going to restaurants. On average, food from your grocery store is 70% less expensive than prepared food.
- Cancel any memberships and subscriptions you don’t use anymore. If you haven’t been to the gym since two weeks after your New Year’s resolution to get fit, but you still get charged $50 every month, cancel your membership!
- Shop thrift, clearance and second hand stores instead of the mall. A bargain is a bargain and getting a slightly worn pair of designer jeans for 90% off of the retail price sounds good to us.
- Have patience and wait for sales instead of impulse buying. We know you want the new model now but next month it’s on discount. Just wait and save yourself some cash.
- Clip coupons and shop bargains whenever possible. Sunday newspapers, Thursday mailers from the post office and online coupon sites are great resources for finding deals on items you are already buying.
- Purchase common household items in bulk for a cheaper overall price tag. Toothpaste, soap, paper towels, toilet paper, deodorant and any other item you buy on a regular basis should be bought in bulk.
- Make a list before grocery shopping for savings every time. Shopping blind can lead to Impulse purchases and those will wreck your budget. Creating a shopping list and sticking to it will ensure you buy the things you actually need and not just the things you want.
5. Upgrade your Income (Earn More Money!)
We get it, it’s not always that easy, but If your expenses have been cut to their minimums and you’re still spending more money than you make, then you need to boost your take home somehow. This may mean you need to get a higher-paying job or even a second job to pull your head above water.
Remember, your main goal here is to gain financial stability and freedom by living within your means.