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How Can I Live Within My Means?

I made the decision to live within my means several years ago, long before I started this blog. In a sense it inspired my desire to launch a personal finance blog where I could share some of the strategies that worked for me. It was not easy though, because I was accustomed to a certain way of living. It was very hard to give up some of the conveniences that I had grown so accustomed to. I was buying lunch every day; going out every weekend; and shopping for clothes just for the fun of it.

How Can I Live Within My Means?

But at some point, I knew that my life needed to change. There were things that I wanted to achieve, and at that point, I did not have a second job. My lifestyle was financed by my main and only job and it was becoming more and more difficult to save money and do all of the things that I just mentioned.

So, to get back on track I had to find a way to live within my means so that I could hit the targets that I set for myself. The lottery winnings were not coming; no one left a large inheritance to me, my savings were not magically increasing, and I did not find a big bag of money. I had to get this done on my own, as soon as possible.

These are some of the tips and tricks that I used to get my life on track and I am still using them up to this day. Admittedly they will not work for everyone. In fact, there were other things that I could have tried, but they would not have worked for me. You have to find solutions that are tailored to your specific situation. All I will ask is that you are honest with yourself about whether the possible solution will work for you.

1. Setting Goals

This is the best way to get your act together. What do you want to achieve in life? Where do you want to be in one month or six months or one year? By setting goals, you are essentially telling your brain that there is something to work towards. And hopefully this will inform and guide your actions.

2. Spending Less Than I Earn

When you live in a world where everything is moving towards being cashless, it is very easy to find yourself in a position where you are spending more than you earn. Swiping a credit card or debit card is an easy no-hassle way to operate. But, unless you’re disciplined and seriously working towards your goals, you can easily find yourself in a negative position.

3. Tracking My Spending

To ensure that I did not spend more than I earned, I implemented basic systems to keep track of my spending. The trick is to keep records of both cash and credit spending and compare them to your budget and bank statements. You can use the Simple Budget Worksheet to get started.

4. Saving At Least 10% of My Income

In the early days of working, when I had very little responsibilities, I was saving almost half of my income. However, as time went on and life started to happen, that figure dropped dramatically. Right now, I make it a point to save a minimum of 10% of my salary. This figure is not negotiable and so it forces me to cut back on other spending, so that I make this target.

5. Cutting Out Unnecessary Expenses

This is one of the most powerful things that I have done to live within my means. It all starts with your goals and then categorising needs and wants. If it’s a need, it should be somehow connected to your goals. If it’s not, it means that it’s a want and you could probably survive without it (at least until after you reach your goals.)

6. Focusing on Accumulating Assets

By focusing on accumulating assets, I’m a lot more cautious with how I spend my money. My mindset and actions shifted because I knew that in order to accumulate assets, I needed money. And to accumulate money, I had no choice but to live below my means. The upside is that I’m in a better financial position with a bit more leverage to accumulate assets.

7. Looking for New Ways to Make Money

When I started Odd Cents in 2011, I did not have any intention of making money. I wanted to write about personal finance, so I jumped right in. However, it jump started my online business and now I am working on online business websites that make money from affiliate programmes. The benefit of this is that I am increasing my earnings, whilst testing new ideas.

8. Trying New Things on My Own

I am a You Tube professional. Guilty! There are some things that I would prefer to find a tutorial for online before I call a professional. This has allowed me to be a little more self-sufficient and not spend money on a minor task. However, if the task is too big for me to handle, I’m honest enough to admit that and hire a professional.

9. Leaving My Credit Cards Alone

This. Is. Hard. Knowing that my favourite online stores are having sales and forbidding myself from buying anything takes all the strength in my body. But because I am living below my means, I have to constantly remind myself of my goals. Depending on where you live, it may cost you more to use that credit card anyway.

10. Creating An Emergency Fund

“When things go wrong, and they sometimes will”, your emergency fund can be a life saver. Over the years, my emergency fund has saved me from several minor inconveniences. The benefit of the emergency fund is that you can use the funds for your emergency, instead of using savings or going into more debt.  

The beautiful thing about personal finance, is that if something does not work for you, you can pick up and go again. There is no one size fits all approach to this. That’s why I encourage my followers to use the Seven Step Financial Makeover to create a plan that works for them. At the end of the day, you have to be happy about where you are in life. And if you’re not, you’re the only one who can get up and do something to change it.

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