Friday, May 15, 2015

Simple Ways To Live Within Your Financial Limits

The core principle that every person should live by in order to avoid debt is to live within your means. Spending within your financial limitations may be easy to say but difficult to do, but once you get the drift and learn to incorporate it in your daily transactions, you will realize later on that you are doing yourself a great favor. When you know that what you have is only enough for your basic needs, forget the grand life. Or if you really want a taste of luxury, find a way to be able to afford it. Using credit will only give you headache in the long run. It is better that you start controlling yourself early on, so that you can save yourself from anxiety brought about by debt and you can prevent financial ruin.

The first and most practical way to live within your financial limits is to know how much you make. Your income sets the limit so you should know how much you are only allowed to use. Do not just estimate, know the exact amount. Consult your paycheck and see the net income for the whole month. Since you pay your bills monthly, it is better that you compute your monthly income, not weekly or annual.

Financial Limits

Now that you know your limits, work within the restraints. Cut back on your expenses. Prioritize needs than wants. Buy the basics first. Make a budget plan to fit your expenses with what you have at hand. Lifestyle change is hard but if you keep yourself focused on long-term results, you would be able to do so. This does not mean you should deprive yourself. You can treat yourself once in a while, especially if the system works and you get to save money.

If your budget plan does not work and you still spend more than what you have despite reducing your expenses, do it again and make more adjustments. If it is still not enough, then an additional source of income would be the answer to your problem. Taking a second job to bring in more money to provide for your expenses may also allow you to save.

One big change that you would need to do to be successful in your attempt to live within your means is to stop relying on credit cards. The main reason is that credit cards are created to let people spend despite the absence of money. Credit cards give you a kind of limitless purchasing power, so using a credit card would allow you to indulge and spend unnecessarily. You remove the limit when you use credit cards. Therefore, if you want to train and discipline yourself, get rid of the card. This way, you avoid the build-up of credit card debt and you teach yourself how to control purchasing impulses and how to prioritize the essentials.

1 comment:

  1. Nice post! Thank you for sharing. I'd like to hear more from you.