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Five Tips on How to Live Within Your Means

Presented By: EJ Cooksey | Tuesday, May 27, 2008 | , , , , | Comments

Living within your means is a liberating way to live your life. It means no debt – debt is one of the most common causes of relationship stress. Living within your means gives you the freedom to save money for special things rather than always scrimping to pay your bills.

Unfortunately, many people don’t live within their means. They live above it, way above it. This happens for many reasons. Maybe they just don’t keep track of their expenses and purchases are made without thinking. Maybe they’re trying to keep up with their friends and family. Maybe shopping is a misguided form of therapy. Whatever the reason, the end result isn’t a happy one.

If you feel that you could do more to live within your means, here are a few tips to help keep your life on track and your financial status right where it belongs:

Tip #1: Keep track of your spending. It is important to know where your money goes. Once you have an idea of what you’re spending your money on, you can begin to control it.

Tip #2: Buy a used car or at least keep your new car for more than a couple years. A new car depreciates the moment you drive it off the lot. Sometimes it depreciates as much as 50%. A used car already has that depreciation figured into the cost.

Tip #3: Don’t be afraid to grocery shop with coupons or stock up on items for sale. Personally I love it when the grocery offers "buy one get one free items", particularly when the items are large ticket items like meats. Not only do I save tons of money but when I can’t figure out what to make for dinner, I can just open my freezer and I have options.

Tip #4: Do buy quality clothing items, not quantity. When you’re shopping for yourself, don’t make whimsical clothing purchases or follow the latest trend. What’s better? Spending $40 on a pair of jeans that will be out of style next season, or spending $50 on a pair of jeans you can wear for five years?

Tip #5: If you have a credit card debt, develop a plan to get out of it. A debt elimination plan begins with reducing your interest rate. A phone call to your creditor can usually start the process. Next, stop the charging on those credit cards and get busy paying them down. Pay more than the minimum balance or you’ll never get it done. A great way to manage the process is to develop a monthly budget. Your budget will contain your income, expenses including debt and your savings.

Living within your means is possible! It is empowering to have complete control over your money and your finances, certainly less stressful than letting your money control you!

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