Financial discipline is the cornerstone of long-term economic stability. With the escalating cost of living, it’s crucial to ensure that you’re well-prepared for unforeseen expenses. This is why 2019 should be the year you embrace the “Living Below Your Means” Challenge.
An Overview
“Living below your means” is a concept that extends beyond merely “living within your means“. The former involves cultivating a lifestyle wherein you consume less than you earn, with the intent of accumulating savings and establishing a financial buffer for future costs.
Embrace Last Year’s Income
A raise or pay increase can be a boon to your financial stability. However, before you adjust your monthly budget to accommodate this increase, consider maintaining your previous lifestyle and channeling the additional income into savings. This practice can provide a significant boost towards your financial goals, be it debt clearance, down payments, retirement funds, or emergency savings.
Financial Tip: If you receive a bonus, resist the urge to splurge. Instead, allocate it towards an emergency fund or high-interest debt repayment.
Analyze Your Spending Habits
Whether or not you decide to take up the “Living Below Your Means” Challenge, a review of your budget and expenditures is always a worthwhile exercise. Look back at the previous year’s spending patterns, identify areas of excess, and make a conscious effort to curb wasteful expenses.
Cut Down on Non-Essential Expenses
A critical step towards living below your means involves reducing frivolous purchases. Opt for home-brewed coffee over daily trips to the café, limit dining out, and consider meal-prepping instead of buying lunch. Use flyers to find best deals for groceries and consider cutting back on unused cable channels.
Use Cash
Financial experts often recommend a cash-only lifestyle. This doesn’t necessarily mean dealing only in physical money, but rather, refraining from credit card usage for a while. Use your debit card or cash for payments, helping you keep track of your spending more effectively.
Other Ways to Embrace the Challenge
Consider supplementing your income through part-time jobs or side gigs, like babysitting or dog walking.
Reevaluate your service providers — auto insurance, cell phone plans, banks — to see if you can secure better deals elsewhere.
Explore free entertainment options like libraries that often host free events and offer a wide range of media.
Opt for second-hand purchases when you need new clothes or furniture.
Conclusion
Living from paycheque to paycheque doesn’t have to be the norm. Make 2023 your year of financial liberation by embracing the “Living Below Your Means” Challenge. If you’re still struggling to meet ends, consider seeking professional financial assistance. A free consultation with a Licensed Insolvency Trustee can help you understand the debt relief options available to you.
