As another recession approaches, we must devise strategies for surviving the crisis. Living below your means is one habit you can develop. So, here are 5 winning ways you can take.
5 Winning ways to spend less
The news is bleak. We are about to experience another recession. But we can certainly ride it out by staying positive while implementing good habits that will allow us to overcome this economic downturn. One habit you can develop is to live below your means. So, here’s sharing 5 winning ways you can go about it.
Budget
The first thing you need to do in order to live below your means is to know first your means. Write down how much you are earning per month and then decide the amount you are going to spend. And that is by creating a budget.
When you have a budget, you will have a visual representation of your monthly inflows and outflows. Because you should always know where your money is going.
For one thing, it will save you the mental anguish of trying to figure out where your money went when you just got paid. Furthermore, you will have control over where your money is spent. Instead of being led astray by the money.
When creating a budget and deciding how much you will spend, you can allocate 50% of your spending plan to basic needs, 20% to savings, 10% to emergency funds, 10% to wants, and the remaining 10% to giving or donations.
You can always adjust the percentages to suit your needs, especially if you are just getting started with your budget.
The important thing is that you adjust your basic spending and have some funds saved for emergency funds, investing- in yourself and future passive income, occasional splurging, and giving back.
Ultimately, having a budget improves your money management skills and sets you on the right track to financial freedom.
Embrace frugality
Some people look down on having a frugal lifestyle. This is because they see frugality as being cheap. But certainly, this is not the case. Being frugal is far from being cheap.
For one thing, frugality is being mindful of your spending. It is knowing how your spending will affect you and the people around you. Frugality is more of spending your money wisely so it does not get wasted.
Whereas cheapness is just going for the one with the lowest price without consideration of its quality and the value that it provides.
For example, investing in classic and high-quality clothing that will last for years is preferable to purchasing trendy or cheap clothing that will only last a few months.
It should be noted, however, that the most expensive items do not always equal high quality, as there are midrange prices that are more durable than the most expensive ones.
So, before you spend, do your research and take some time to consider whether you really need the item and whether the one you’re eyeing is worth the price.
Manage your spending
Budgeting allows you to direct where your money goes, whether it goes to necessities, savings, emergency funds, or investments. Managing your spending, on the other hand, is concerned with tracking your expenses or cash outflow. It’s a detailed record of where your money actually goes.
Keep a journal or a simple spreadsheet where you can track your daily spending. This way, you can see exactly what you buy and spend money on, on a daily basis.
You can then review your record at the end of the week or month to see if these are truly necessities that you should continue to spend money on.
When you better manage your spending, you can adjust or realign your budget to achieve financial freedom sooner.
Don’t keep up with the Joneses
For sure we have all heard about the Joneses and their lifestyle. And how trying to keep up with them will lead to financial ruin.
So leave the Joneses be and focus instead on your own sensible lifestyle. One that is frugal but with occasional splurges to avoid feeling deprived.
So how exactly do you avoid the Joneses? Here are some ideas to get you started:
- Limit your time on social media. This way you can avoid looking at how well the lives of your social media friends are going and so limit the emergence of negative emotions such as envy.
- Spend time offline by going for hobbies you enjoy. For example, reading, gardening, taking a leisurely walk, exercising, playing with your kids or pets, or spending time with your family.
- Enrich yourself. Enhance your skills. Go do something new.
- Just be your wonderful self. There is no need to impress anybody with your big house, new car, high-end bags, or shoes.
- Count your blessings. Be grateful for the things you already have.
- Instead of buy, buy, buy try to give, give, give. And remember giving doesn’t always have to be money, it can be in the form of time, kind, or service.
- Focus on your goals and how you can achieve them.
Improve your money management skills
Lastly, it is important that you improve your money management skills. Start with the first four methods mentioned in this article and build from there.
Recognize the significance of money management skills in your life so that you can apply them to your personal finances.
Become the master of your money. Invest time in reading about personal finance. Review your budget regularly. And make adjustments to it if necessary.
When you know your way with your money, you will live a much better quality of life.
Summary
To summarize, as another recession looms, it is critical that we live below our means. This is so that we can ride out the negative effects of a financial crisis, get a better handle on our money, and actually improve our financial lives.
And how exactly do we practice living below our means? Here are the 5 winning ways to go about it:
- Have a budget,
- Embrace frugality,
- Manage your spending,
- Don’t keep up with the Joneses, and
- Improve your money management skills.
By building on these methods and incorporating them into your daily life, you will be well on your way to overcoming the recession and living a more fulfilling life free of financial worries.
Please share your thoughts or ideas about 5 Winning Ways To Live Below Your Means in the comments below. And if you liked this article, you might be interested as well in these articles:
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Outside reference/s:
How To Start Living Below Your Means
25 Reasons Keeping Up With the Joneses’ is a Terrible Pursuit