Living Below Your Means

 

It is common in the U.S. to live paycheck to paycheck, often accruing large levels of debt along the way. Try living below your means by putting something away for a rainy day. As income increases, increase your savings plan. Try not to buy a larger car or spend more simply because there is more to spend. Hold off on unnecessary purchases. There is a saying that the more you make, the more you spend.

It is not enough to live within your means. This simply means that your income is just covering your expenses. However, this typically leaves no money left over to go towards emergency savings or a retirement account. If an emergency occurs, the individual often has little choice but to turn to credit for help. This is a sure fire way to accumulate debt in a hurry.

The key is to live below your means; basically to spend less than you make. The savings goes into the bank to cover your financial future. This is more difficult than it sounds, so here are some practical hints.

Start by making a budget. This is an essential element for financial health. It helps figure out how much you can afford to spend and how much needs to be saved for the future. It is key to uncover the wants from the needs. Needs have to be met, but wants do not. When planning the wants, make sure that they are in line with your budget. Get help. Find a friend or relative to help keep you accountable. Shop and purchase wisely. There are all kinds of ways to save money, buying on line, purchasing store brands, using coupons and doing comparison shopping Careful buying habits can save thousands of dollars which can be used to pay down debts or go towards savings. Take advantage of the company savings or retirement plans. Put away a percentage of your paycheck each pay period. If you don't see it, you won't spend it.

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