Income vs Expenses: 7 Tips to Living Within Your Means

Listen, and listen very carefully because this involves your life. Living within your means means more than just balancing your budget. It means being aware of the difference between what you need and what you want. 

This simply means becoming mindful of how you spend your money, but if done properly, you wont deprive yourself of things that makes you really happy.

Below we offer you 10 lifeline tips to make sure you never end up with more month than money.
Manage Your Income and Expenses

Know your income and expenses
The first thing you need to know is what’s rolling into your account and what’s going out. Make a list of any and all income you have from your job, side work, pension or anywhere else. Make a list of every bill you have, from rent to car payment, don't leave out anything.

These are your fixed expenses – the ones you have limited control over.

The difference between your income and fixed expenses is what’s left for the expenses you can control — your variable and discretionary expenses. Most of us have sufficient income to cover our fixed expenses. After all, we wouldn’t have taken on obligations we couldn’t pay.

These variable and discretionary expenses often get out of your control.

Track your expenses
Always have a spending plan aka a budget, is the single best way to ensure you live within your means. It lays out what you plan to spend. To keep tabs on your progress, or lack thereof, you’ll need to track your money as you spend it. An online budget service can make your life easy.

If you want to live within your means and reach your target goals, you have to track where your money’s going.

Separate wants and needs
Whenever you go shopping, note the difference between a want and a need, this will keep you out of debt. Before every purchase, make a purchase, ask yourself if you really need it. If you don’t, wait before you buy it. Use the 48 hours rule. You see something you need, wait for a while, most of the times you might decide against it.

Never compete
Don’t fall victim with trying to keep up with your pals mentality. They might roll in posh wheels, latest technology or expensive vacations, but you don't have to follow suit. Think of it this way: Your neighbor might have financed that Mercedes, put the new flat-screen on his credit card, and taken out a personal loan to pay for a vacation.

Pay in cash
It might not be easy, but always adopt a cash lifestyle to avoid falling into the debt trap. If you can’t afford to buy something now, don’t pull out that credit card, please. Instead, save up and pay cash.
And always keep an emergency fund, you will definitely need it because life is unpredictable. If you don’t have three to six months of expenses saved up, start saving now.

When something goes wrong, and it will, you won’t have to reach for your credit card or take out a loan to pay for it.

Save, save and save money
The habit to save money will help you stop overextending yourself financially. Never walk into the grocery store unprepared. Before you shop, clip or print out coupons, check the weekly circular, and make a list. Compare and contrast prices before you buy. Go for a secondhand, cut down on expenses.

Skip coffee or eating out
Sure, it tastes fantastic, but it costs a leg and an arm. Rather make your coffee at home. Never eat out when you can carry a lunchbox with your prepared meal.


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