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Tips For Living Within Your Means


Becoming rich or, at least, wealthy, is one of the biggest dreams for many adults, but until you reach your desired level of wealth, learning to live within your means is one of the most important things for comfortable living. Living within your means doesn’t just mean budgeting your expenses – it means that you need to see the difference between the things you want and the things you truly need. Find out how to spend money in a smart way.


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Know your income

Before you know how much you can spend, you need to know exactly how much you make. It’s much easier if you’re a salaried employee and the only provider for the family – in this case you need to simply know your monthly salary. However, if there is more than one person making money in your household, or if you’re a freelance or part-time employee without a fixed income, the best way to know your monthly income is to take all the money you’ve made in the last six month and divide that number by six.



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List your essentials

Every household has a different understanding of essentials: some families can easily survive without any entertainment expenses, while others can’t imagine living without a weekly visit to the cinema. That is why your list of essentials will differ from similar lists in other families. Nevertheless, there are several universal expenses that are familiar to every household – namely, groceries, utility bills, car maintenance or public transportation fees, and clothing.



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Control your expenses

In order to know whether you live within your means, you need to make sure that your expenses don’t exceed your income. Recording everything you’ve spent money on takes some effort, but it’s still an effective way of knowing if you’re overspending. This task can be much easier if you mostly shop at places that provide you with a bill, like large supermarkets and department stores. If you prefer shopping at markets and small shops that don’t hand out bills, you can use your smartphone to record your purchases, then combine the data into an Excel spreadsheet or special app, and see how much you spend in a given period of time.



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Categorize your purchases

When you have all the information about your expenses from last week or last month, you can use an Excel spreadsheet to create a detailed analysis of your purchases. In order to get a clear picture of your finances, divide the spreadsheet into categories like Groceries, Clothing, Car maintenance and fuel, Eating out, Home appliances, etc. See which category takes up most of your income, and think whether your expenses in this category can be optimized. For example, if your family eats out several times a week, a money-saving alternative could be organizing dinner parties for your friends and family, where every guest brings something to the table.



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Increase your income

If you’re doing your best, but still can’t bring the expenses down, it may be time to consider boosting your income. If you’re the only member of the household making money, you can think about taking extra hours at work, asking for a raise, or looking for a better paying job. If you have a stay-at-home wife, ask if she can take a part-time job or make some money working at home. The same can be done with your older teenaged children if they’re willing to help the family out by taking part in growing the family income.



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