…Although the median household income in 2016 was $60,000, the average American family actually owes more than $100,000 in debt…Habitually buying more than you can afford, and juggling bills or relying on loans and credit cards…could get to the point where it feels like you’re working simply to pay bills. No one wants to feel that way. Therefore, you need to break the debt cycle and start living within your means. Just how do you do that? There are a lot of ways you can get there, but here are a few suggestions:
The original article has been edited here by munKNEE.com for length (…) and clarity ([ ])
1. Know the facts –
Are you aware of how much you make and how many bills you’re responsible for? If not, now is the time to learn all the facts. This will help you to gauge how far beyond your means you’re living. Review all of your bills for the year and compare it to your annual salary. How does it measure up?
2. Be wise when borrowing –
Even the most financially savvy find themselves in a jam on occasion. If you need to borrow money, make sure that you’re smart about it. In other words, only borrow if it’s absolutely necessary and check your budget to ensure you can repay the loan to avoid further trouble. For example, if the car breaks down, you may need to cover the repairs. Using quick cash loans can help you resolve the matter. They also provide you with time to repay them which allows you to handle your emergency and avoid incurring too much debt.
3. Cut out the unnecessary –
Now that reality is staring you in the face, it’s time to roll up your sleeves and get serious about reducing your spending. This means cutting out the unnecessary expenses.
- If you’re drinking a cup of gourmet coffee every day from a local cafe, perhaps it’s time to invest in a coffee maker and beans and make it at home.
- If you have a new car but the payments are half your take-home pay, perhaps you should sell it and get a more affordable car or trade it in for something cheaper.
Be honest with yourself and cut out everything that you don’t need. Frugal lifestyle practices can come in handy as you look for ways to live without what you believed to be a necessary expense.
4. Only buy what you can afford to pay cash for–
Before making a purchase of a big-ticket item, review your budget. Do you currently have the money to make a purchase without having to charge it or borrow money for it? If not, save up until you do. There’s something about living within your means, using your own money to pay for things you want that brings such joy.
5. Build emergency savings –
Another way to make sure you’re living within your means is to have a nest egg to handle the unexpected. Start building an emergency saving account that has at least three to six months worth of expenses in it. This way, should something come up you weren’t prepared for, you can dip in your savings account instead of incurring more debt.
If you’re drowning in debt like most Americans today, living within your means may seem impossible. However, that is far from the truth. If you learn to be mindful of your finances and make decisions based on the facts, you can essentially:
- cut out the wasteful spending,
- increase your savings,
- and start investing your money in things that are really beneficial.
As you begin to make some changes in your financial habits, you’ll start to notice a difference not only in your checking and savings but in your mood as well.
Related Articles From the munKNEE Vault:
Daydreaming about retirement is easy, but saving for it, however, takes time and effort — and is something a lot of Americans struggle with – but there are strategies that can help make the process easier. Here are 20 ways to pad your bank account before it’s time to retire.
When it comes to guilty pleasures, we all have a few. Some vices are fine to indulge in every once in a while — like that weekly caramel latte. However, splurging too much on these vices can rob our budget, and in some cases, our health. Here are six guilty pleasures that are destroying your budget.
If you choose cash over credit, it will cost you tens of thousands of dollars over the long term. Here’s why.
By following the 5 most critical personal finance tips outlined below, you are going to see a major improvement in your finances and achieve wealth that you didn’t think was possible. Let’s get started!
Many times we think that the rising cost of living is a part of life but the truth is there are most likely things you are doing to artificially increase your cost of living. With a few small changes, you can lower your cost of living and start saving more money. Below are “tricks” on how to stop the rising cost of living:
Most people get some kind of raise each year. They earn a little more than they did in the year before. Without a plan to save that raise, it’s very easy to use it up by adding a few luxuries or consumption to your regular spending.
If you are hoping to live a happier, fulfilled life without money stress, you may not want to obsess with the Joneses. You can outsmart them by making better choices. HERE are several ways you can likely beat the Joneses and improve your financial health.