Talk about first-world problems; one of the most difficult things about living in the U.S is there is always something new to want. What’s more, these things are presented as if your life is lacking if you’re not in possession of them. Worse, the lure of easy credit can make acquiring things seem so undeniably easy. Of course, the other side of this is the fact that you can wind up deeply in debt if you’re not careful. With that in mind, here’s how you can live below your means—without feeling poor.
Set a goal
Whether it’s to have $100,000 in cash saved by a certain point in time or to be able to pay cash for a richly deserved vacation, setting goals gives you something to aim for and a yardstick by which you can measure your success. This gives you something you can hold out for as being more important than having the latest iPhone when a two-generation old phone will serve you just as well—for far less money.
Pay yourself first
Set aside at least 15 percent of every dollar of income you earn. Enrolling in a payroll savings plan pulls the money from your paycheck before you get it, making it less painful. After all, you won’t miss what you don’t see. What’s more, if you put it in something like U.S. Savings Bonds, your money will grow far more quickly than it will in a regular savings account. And, because they move the money before you see it, you’re less tempted to spend the cash on a frivolity you don’t really need.
Which brings us to—
Separate needs from wants
Learning to distinguish between your needs and your wants will make your financial decisions more simple. It’s easy to convince yourself you need a new car when the reality is a late model car purchased from a major rental company will serve you just as well, cost a whole lot less and come with a warranty.
Similarly, the oldest computer you can find capable of running the newest operating system will cost you a lot less money and do everything you need it to do—albeit a bit more slowly. However, the savings can be substantial.
While we’re on the subject, do you really need a 3000 square-foot house, or do you just want one? Thinking this way satisfies your needs, keeps cash in your pocket and gets you closer to living a debt-free lifestyle and financial freedom.
Eliminate nickel and dime expenses
You no longer have to pay for hundreds of channels you never watch. You can get all of your local broadcast channels for free with a digital antenna—in high definition. Meanwhile, services like Netflix, Amazon Prime, and other streaming platforms deliver more programming than you’ll ever have time to watch, for far less money.
What’s more, if you buy your own modem and router, you can have more than adequate internet service for $40 a month. The devices will pay for themselves within a year because you won’t be paying to rent them.
While you’re eliminating things, how many automatic –debit subscriptions have you taken, for which you’re paying $3.99 or more a month, but don’t use? Go through your mobile device and stop anything you haven’t looked at in the past three months or more.
Addressing your debt
If you have credit cards, establish a plan by which you’ll pay them all off as quickly as possible so you can divert those credit card payments toward the goal you set. This will put more money in your hands, giving you even more room in your budget to live below your means. Remember, your end goal is to lead a debt-free life.
If you’re reading this because your debts have gotten out of hand and you’re having trouble making minimum payments, companies like Freedom Debt Relief could help resolve your debts faster, for less than you owe.
You really can live below your means without feeling deprived. Having a goal you’re trying to attain takes away the feeling of sacrifice by giving you something to which you can look forward to achieving.