Are You Living Within Your Means?
Boy, do I wish I had paid more attention in my economics class in high school. Like many other Americans today, I am paying down a mountain of debt that somehow magically manifested itself in my life. It’s amazing how quickly one dollar spent can turn into two and then three thousand dollars come and gone. It’s good to know, though, that I am in good company.
When we were younger, many of us were told by a parent or some sort of adult figure that “money doesn’t grow on trees.” Still, more of us had this grandiose idea that there are more important things than money- such as living a fruitful life that doesn’t focus so much on monetary or commercialized things. However, the sad truth is that no matter which way we slice it, we need money to live. Life revolves around paper and lots of it.
Living Within Your Means
Part of knowing how to manage your finances in order to achieve the maximum success possible is simply knowing how to live within your means and then actually doing it. This translates into not getting too caught up in the credit card craze and charging up a storm simply because you were given the gift of a high credit limit. Rather, millions of us need to learn how not to spend what we don’t have. When you get a paycheck, you need to keep in mind all of the other things that you will automatically have to spend money on such as bills, car insurance health insurance, taxes, mortgages and/or rent. It’s amazing to see how quickly one paycheck can come and go- especially since our paychecks are already taxed on top of everything else.
Some Helpful Advice
These are some helpful tips that I have come across in my own money-saving adventures:
- Formulate a Plan: Sit down and figure out how much you earn per paycheck and/or per month
- Cut Back: Figure out what things you can and can’t live out (i.e. the 3 Starbucks Coffees/day) and cut back
- Start Saving:If you don’t already have some sort of savings account or 401k plan, speak to a financial advisor about getting one started; it’ll only help you in the long run!
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June 09 2008 02:00 am | Internet Marketing
John on 09 Jun 2008 at 7:43 am #
Success in personal finance can be improved with ideas that take time to learn. But one of the most important and pretty simple ideas is just this: spend less than you make and save the rest. Things get a little more complicated once you start wondering how much you should save for what (emergency fund, new car, retirement, vacation, kids education…). But living within your means is the place to start.