If you have been following me for any length of time, you know that my husband and I live off of one income. Sure we both work and have great paying jobs, but because of our prior financial struggles, we decided that it would be best if we live off of one income and use the other income for investing and saving. Not only do we live off of one income, we both take any raises and bonuses we receive on our jobs and use them for saving and investing as well. When I started at the company I work for, I was making $12.88 an hour. Several promotions and almost 9 years later, I make much more than that, but I still live as if I make $12.88 an hour. My husband won’t allow me to disclose his salary, but let’s just say he brings home the bacon. We plan our purchases for any big ticket items that we desire and we save for them. We live not only within our means, but below it.
Now we don’t live like paupers, nor are we miserly, but we have experienced the “keep up with the Joneses” lifestyle and it was not pretty. We were broke, but we had every toy possible. That lifestyle brought us tons of grief and it just wasn’t for us. That time in our lives taught us a valuable lesson and that lesson was to live below our means. Fast forward, all of our children are adults so we can splurge when we want to, however, we will never forget the way we felt when we were broke, the stress that we were under and the feeling’s of helplessness and hopelessness that plagued us. It was a dark time, that we vowed to never re-visit. Case in point, we don’t splurge often and that is fine with us.
Now I am not telling you to go off the grid and live a barbaric type of life with no amenities, but what I am telling you; if you are struggling to make ends meet and living paycheck to paycheck, or as I like to say ‘pocheck to ‘pocheck, then you may want to consider living within or below your means. Often times, running out of month before you run out of money is not a sign that you don’t have enough money coming in, it is a sign that you may very well be living above your means. How do you know if you are living above your means? Well, if you have ever received a pay raise and found that you still run out of money just as quickly and easily as before you received the raise; then you probably are living above your means. There is great news, you can learn to live within or below your means and I will show you exactly how. These tip’s will have you living within your means in no time flat.
Keep an honest budget
The first step to living within your mans is to keep a completely honest budget. That is the reason for this bootcamp, to prepare you to not only live on a budget, but to make your money work for you. By now, you should have made a list of all of your fixed expenses. No rounding up or down or guesstimates, you need to know EXACTLY how much you have going out each month.
By now, you should have also made a list of your variable expenses. With this list, you are writing how much you want to spend, not how much you currently spend, we will take care of that later. Include every category you spend money in, no matter how random it may seem, include it anyway.
Know your numbers
You must know exactly how much money is coming in, so that, you will be able to cover your various expenses. Get your check stubs and record how much you bring home. Again, don’t guesstimate, take the time and retrieve your check stub. You want an exact figure and not a ballpark.
Track your expenses
If you need more info on tracking your expenses, then you can read my post on that here. This is the tough part. You want to know how much money you have going out over a 30-90 day period. You will need to keep receipts or write down cash purchases, but any debit or credit card purchases can be reviewed on the statement. At the end of each week, sort your transactions into the categories on your budget. At the end of your tracking period, you can go through and see exactly how much money you have spent. You may even be surprised to find out that you have gone over budget in some areas.
Set your budget and save on auto-pilot
Now for the fun part, editing your budget. First, figure out what you want to do with any extra money. A few suggestions would be pay down/off debt, save, or even invest. Next make sure to set your savings on auto-pilot. Have a certain amount out of your paycheck directly to your savings account, preferably one you can’t easily access, because if the money is not there to spend it may just be pretty hard to go over budget.
Now look at the money you have left, after paying for essentials, such as, food, shelter, utilities and gas. Do you see anywhere you can cut back?
Increase your income
If you are still having trouble, you may want to begin thinking of way’s to earn some extra income. You know, get a side hustle. During my dark financial period, I took in extra money by doing make-up. That is still something that I do today, make-up. My husband did body work and repairs to cars to earn extra money. He does that till this day. Like I said, we aren’t paupers or miserly, but we have developed habit’s that will last us as long as we are physically able to do the work.
Don’t think of living within or below your means as being restrictive. It is actually opening you up for more choices and financial freedom. You can think of it as a safe boundary, and when you are able to to increase your income you can increase your boundaries. Living within or below your means is not always an easy thing to do, it takes lot’s of discipline. I hope these tips have helped.