One of the common trends around most City Girl Savings’ articles is this concept of living within your means…or even better, below them! Most successful savers and financially successful people in general have mastered the living within your means phenomena.
In fact, they have mastered it so well that they actually live below their means! As for the rest of us, we must crawl before we can walk.
Before we can master living within or under our means, we need to know how to stop living above our means. To help clarify the concept of living within your means, I’ve done some research to pinpoint simple ways you can live within your means and still enjoy a life you want. Be prepared to take some mental notes, and start implementing immediately!
How you can live within your means…
#1 Understand Your Financial Situation (with a Budget)
How can you live within your means, if you don’t even know what your means are?! Before you can start pinpointing where you can cut back, you need know exactly what’s coming in and going out. The best way to get this information is through a budget.
A budget is simply a tool that should show you what money is coming in over the course of the month, and where your money is being spent over the course of that same month.
To get a handle on all of that information, it’s best to refer back to last month’s bank account and credit card statements. Write down how much money you made through your main job and any other side hustles.
Then, write down your recurring expenses. Lastly, write down all of your discretionary spending. If the numbers are telling you think you spent more than you made, you are living above your means. The first step is to know, the second step is to change.
#2 Cut Back Your Spending
After reviewing your previous month’s spending in detail, you should be able to see exactly where your money went. Discretionary spending is often where most City Girls are overspending and exceeding their means.
Start by giving yourself a limit on discretionary spending, moving forward. Once you’ve managed to save some money in that field, focus on your recurring expenses. Is there any service or subscription you have that you aren’t using? Is there anything that can be cut down, like cable or gym fees?
Cutting back your spending can get you below that threshold of spending more than you make. If you find that cutting back your expenses doesn’t get you below that threshold, your only other option is to bring in more money.
#3 Bring in More Money
One sure-fire way to ensure you are living within your means (and even under them) is to increase the amount of money you bring in on a regular basis. There are a variety of ways you can bring in more money to help you break even every month. Here are a few options to think about when bringing in more money:
- Work overtime at your current job, if applicable
- Become a virtual assistant or freelance writer
- Start a blog and immediately use display advertising
- Rent out a room in your place
- Sell old items or things you no longer want
- Adjust your tax withholdings, if you typically get a refund
- Take nice photos and sell them online
- Take online surveys
If a second job is what you need to do to break even every month, then it’s best to bite the bullet and get one. If you can turn your hobbies or things you enjoy doing into a business, then don’t procrastinate! Get started as soon as you can so you can start turning a profit.
#4 Don’t Rely on Credit Cards
If you are using your credit cards, but paying them off in full every month, then continue doing so! If you are incorporating the use of your credit cards in your budget, for expenses you should be covering with cash, stop immediately. It is not possible to live within your means but have a ton of credit card debt. Credit card debt comes with insanely high interest. This interest can keep you in debt a lot longer than you think.
Another reason you don’t want to rely on credit cards is because your credit card company can decrease your credit limit or even close your credit card at any time without warning.
It’s actually in the terms and agreement that came with the card. If you are relying on credit and your credit is taken away from you, what are you going to do? Break the bad habit of using credit cards as a scape-goat and start using only the money you have to get by.
#5 Don’t Buy Things Just to Keep Up
With social media as big as it is, it’s very easy to see what your friends, family or celebrities are doing at every moment. Not only does this take your mind off what you should be doing for YOU, it can make you feel like you need to buy things just to keep up.
Resist the social pressure to buy things you don’t need, just to keep up with friends or celebrities. You can use credit to fake that life for a short amount of time, but when it runs out (and it definitely will), you will be paying for it.
The best advice I have for avoiding that need to keep up, is to limit your social media “scrolling”. Instead, only follow people and companies that inspire you to do better and work harder.
If you are following anyone that makes you feel envious or not worthy of what you currently have, unfollow them immediately. Nothing and no one should make you feel that way. Focus on bettering yourself and bringing in more money, and don’t worry about what other people have or what they’re doing.
#6 Set Yourself Up for Success
While learning to live within your means is not an overnight process, there are things you can do to make it happen faster. Set yourself up for financial success by doing the following:
- Using cash for all non-bill related purchases
- Contributing to a 401k plan
- Saving 3-6 months’ worth of expenses for an emergency
- Setting and following your budget
- Taking the credit cards out of your wallet
- Focusing on things that are going to better your situation
Even small changes now can lead to big results later. You don’t have to give up all of the things you love, you simply have to learn how to save for them to ensure they are not forcing you to live beyond your means.
Related: 6 Need-to-Know Principles of Personal Finance
Guess what City Girls? You can master living within and below your means! With the habits above, you can make a huge impact on your financial future. If you need assistance, don’t be afraid to seek help. I offer one-on-one coaching and other services to help women reach their true potential! What is stopping you from living within your means? How are you trying to change your financial situation? Leave a comment below to share your tips, fears and frustrations!
