April 30, 2010
Filed under: Budget, Reduce Debt, Tips For Living Withing Your Means — Bonnie @ 3:21 am
More and more people are finding themselves in debt, so the concept of living within your means without debt is one well worth exploring. So, what does it mean to “live within your means without debt”? Living within your means signifies being on top of your finances. It means always knowing exactly how much you can afford to spend on a given thing or in a given area of your life. It means a low-stress financial outlook and lifestyle where you don’t loose sleep trying to figure out how to pay for that new jacket, car, vacation, or whatever your weakness might be. Here are some tips for adopting the philosophy of living within your means and learning the joy of living without debt.
Spend less than you earn.
This is a simple mantra that you should adopt to live within your means without debt: spend less than you earn. It really is that simple. Most of us, however, do the exact opposite. In order to spend less than you earn you need to sit down and face the facts of your current finances. Do some simple math: how much gross income do you take in each month? Next, subtract how much you need for life’s essentials, including putting a roof over your head, food in your body and clothes on your back.
How are you spending you money?
Here are how the experts day you should be dividing your hard earned money each month. You should be spending 35% of your monthly income on housing and housing-related costs like repairs and the electric bill. Transportation costs should equal around 15 % of your monthly income. Shopping, food and entertainment should come in at about 25 %. Around 15 % of your income should be aimed at clearing any remaining debt and finally, don’t forget to pay yourself. Around 10% of your income should be put into savings.
Study your numbers
Now that you have the numbers of how your monthly spending should be broken up, do the numbers and see how your current monthly spending stands up. Are you spending way too much on your mortgage or rent? Are you splurging on entertainment or shopping sprees? Are you spending enough each month on clearing those credit card and other debts or are you only paying off interest? Are you saving anything for emergencies or the future? These can be hard questions to answer, especially if your think the answer is going to be “no”, but it is also a very important step to take if you are serious about living within your means without debt.
The number one secret to living within your means
This is not really a secret – most people who are debt-free or serious about becoming debt-free can find this out for themselves. What is it? Live below your means – that is spend less than you make. A lot less. How can you do this? Try to attack the problem from the angle that you know needs attention. For instance, if you are a shop-a-holic, work on curbing your shopping sprees by making – and sticking to – a list that you’ve made before even stepping out your door. Also, try consolidating your shopping trips into one trip rather than making smaller trips spread throughout the week; that way you will have fewer opportunities to be tempted to buy something that you don’t really need or can’t afford. And, make the choice to but supermarket brands rather than name brands and you will find you’re spending much less at the till.
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April 12, 2010
Filed under: Reduce Debt, Tips For Living Withing Your Means — Bonnie @ 5:59 am
You’ve heard of people spending thousands of dollars on their new living room, dining room or bedroom sets. They think they’re getting a good deal and you feel overwhelmed! Chances are; if you’re reading this then you know deep down that there must be a better way of getting quality furniture for reasonable prices, and you’d be right. You can get good, even great, furniture and still live within your means. Here are some of the ways:
Shop at second-hand and discount stores, you’ll be surprised at what you can find. In fact, second-hand furniture can often be in better condition than new items because furniture used to be made to last. You might be better off with a table or couch that is ten or even thirty years old.
Have a look at bidding on online auction items. Sites like eBay have specials all the time on new and used furniture. One of the reasons that furniture can be sold so cheaply is that eBay sellers will often purchase huge lots of close-out items to sell on, which then gives consumers a way to purchase cheap furniture.
Shop at factory outlets of close-out stores. Many models of high-quality couches, chairs, dining room sets and so on are sold cheap because the manufacturer or retailer wants to get rid of them. This doesn’t mean that the items are low quality. Sometimes, they are just surplus or older models that have been superseded.
Get creative. For example, if you don’t have the money to replace that 1970’s couch whose upholstery looks dated and worn out, learn how to restore it with a more updated covering. Likewise, you could learn to sand, stain and varnish old wooden furniture instead of buying a new piece or set. It would almost be like you’d bought new furniture!
Take advantage of one-off opportunities. It can be easy to find furniture that’s being discarded by people who are moving, who will sometimes give it away because they don’t want to be troubled with the expense of hauling it. That; or maybe they don’t need or want it in their new home.
Visit garage sales, moving sales and estate sales. This is a great way to come across terrific furniture finds. You can almost always find something of value at these types of sales for sometimes less than half of their original costs.
Ask around. Perhaps some of your good-hearted friends or family members know of someone who has inexpensive furniture to sell or, even better, give away. Word travels fast when people know someone is in need. Sooner or later, you are bound to hear from someone willing to give you a good deal on pre-loved furniture.
Other than that, perhaps all you need is a bit of patience and persistence. Your quest for the right-looking, inexpensive furniture is likely to pay off faster than you think if you start looking in the right places. Not only that, but your friends and family are bound to be impressed! Whether or not you tell them where you got your new furniture is at your discretion, but remember; there is no shame in discount shopping if it helps you live within your means.
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April 2, 2010
Filed under: Reduce Debt, Tips For Living Withing Your Means — Bonnie @ 8:30 pm
So, you are tired of being broke, and you keep telling yourself that you want to save. Here are some ideas to help you stop living paycheck to paycheck and some simple solutions to your money management problems.
Do you know how much money you actually need to cover your monthly expenses? Make a list of how much money is needed to cover your rent, food, clothing and other basic necessities. If your list of expenses is greater than the amount of money you are earning, then you either need to find better-paid employment, or you may need to consider that you are living above your means (I have an article on my blog that can help you with that). The next step is to allocate money for all of the important expenses and also allocate a reasonable amount of money for entertainment.
Never go shopping when you are hungry. Generally you can spend between 10 to 20% less at the grocery store if you aren’t hungry and craving everything in sight. You will also be more inclined to purchase healthier foods which last longer if you shop on a full stomach. Take a list with you and stick to it. Not only will that save you money at the register, but you will save on transportation expenses by not having to make repeated trips to the store.
Avoid using credit cards, shop with debit cards instead. That way you know exactly how much you can spend and you will be more likely to not overspend. Is you are contemplating buying an item on credit, make sure you are able to make at least the minimum monthly payment – and better still more than the minimum – every single month.
Build up an emergency fund. Start setting aside an amount each month so that if your car breaks down, you lose your cell phone, or your child is rushed to hospital you will have the money available to deal with it. This may be easier said than done, but it will save you stress and trouble. All it would take perhaps to create an emergency fund is a few less bottles of soda, packs of gum or children’s toys (yes, in most cases your kids do already have enough toys).
Keep track of spending. Make sure you check you bank account before you withdraw more money to go shopping. It will save you in the long run, especially from bank overdraft fees. By keeping track of your expenses you will likely save more than otherwise, and that extra money can be put to much greater use, such as being put away for emergencies or invested for a profit.
Above and beyond the amount you regularly save each month (10% is a good proportion to start with) it is recommended that you plan for your future by investing in some way. Plant your money in an investment account, or start a business so you can have a more enriching career. Place your money in an IRA, or try your luck in the stock market.
Analyze any risk before you make any major investments, and it’s recommended that you get advice from a financial adviser. Also, carefully consider any risks when making major purchases, such as a house, car or other long-lasting item. Remember that you will need to be fairly confident given your current financial status that you will be able to continue to make payments.
Avoid taking out payday loans or any other easy credit. Although these have been helpful to some people who really find themselves in a financial jam, they can be used as a quick fix all too easily and can be addictive. Soon you could find yourself needing to commit your whole paycheck to money you have not even seen yet if you get into this habit, which is very hard to break. Also, consider that the interest on these types of loans can be as high as 20% and sometimes more.
One additional tip to remember is that just because you are offered credit, it doesn’t mean you should take it. Work to break the cycle of debt and not fall deeper into that particular hole. If you need further assistance with money management see a debt counselor. The internet is also full of money-saving tips for individuals and families.
More Information on Eliminating Debt
March 1, 2010
Filed under: Reduce Debt, Tips For Living Withing Your Means — Bonnie @ 12:45 pm
These days we could all stand to lower our spending and save some money, but if you are in debt or tend to overspend, what can you do to improve your finances and live within, or better still, below your means? Here are some tips.
Save your change
Chances are you ignore the spare change you tend to find in jeans pockets or lying on a dresser or stuffed into your wallet. How much have you got in your pocket or in the bottom of your handbag right now? These little amounts tend to get ignored because they seem so insignificant. But it’s time to start paying attention to them. Set up a stray-change jar somewhere you are most likely to see it. Try on your bedside table on the kitchen counter. Everyday you come home from school or work or wherever track down all those little bits and put them in the jar.
Do it everyday for a couple of weeks and it will become habit. Do it for six months and you’ll be surprised by the size of the cache of extra money. Make a deal with yourself, for say three months, before you start taking anything from the jar. Or mark a line half way up the jar and don’t take from it unless the change and money meets the line. If you are really disciplined, and this will take time (psychologists say it take three weeks for an action to become a habit), attach a sticker to the jar with a future date written on it, and don’t take from the jar until that date. Aim for a minimum of six months, or even a year!
Try it for a couple of weeks, then multiply it out until you reach the 52 weeks in a year – you’ll be surprised by how much you can save! Setting aside your change is a good way to trick yourself into saving money – the little amounts won’t feel like you are reducing spending money and you become more conscious of how you treat your money.
Make your own coffee
If you are like a lot of working Americans you probably begin your workday with a cup of hot coffee, and chances are you let someone else make it for you. Whether it’s Starbuck or a less expensive brand, you are probably spending a good chunk of change just by having others serve you coffee. You are looking at between three to five bucks a pop for a cup of name-brand latte or coffee. Save yourself some hard-earned cash and invest in a good coffee maker (you probable already have one), and a good portable coffee cup or canteen. Experiment with different coffee brands until you find one that you enjoy even more than that expensive café coffee. Simply getting into the habit of making your own coffee two or three times a week will save you hundreds of dollars over a year. Multiply it out yourself and see!
How much are you spending on rent?
Are you overpaying on rent? Many people are. Are you paying extra for a pool you never swim in, a fitness centre you never use or a private clubhouse you never frequent? If your monthly rent is padded with amenities that you never take advantage of, take a serious look at your living situation and calculate how much you would save if you moved to a house, condo community or apartment complex that better suits your lifestyle. Other rent-reducing options include downsizing so that you’re not paying rent on space you never use, or consider taking in a roommate.
Transportation costs
How much are you spending on getting to and from work or school each week? In these days of record prices for gas, chances are you’re spending too much money on your commute. Simply taking the bus or train or carpooling a few times a week can help you live within your means more comfortably.
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