7 Strategies to Help You Function Within Your Means Without Feeling Limited
Determine the Amount of Money You're Bringing In
The first important step to staying within budget is to determine the amount of money that you bring in each month. In addition to your actual hourly rate or salary, look at your paycheck to decipher your net income. Whether it's bi-weekly, weekly or every other week, bills are usually paid on a monthly basis. When you've determined your pay schedule, you'll be prepared to set up what bills get paid and when each month.
Reduce Your Spending
When you've determined your net income, you should find ways to cut your monthly spending to fit with the money that you're bringing in. Using a budget, map out the outgoing money compared to the funds coming in. If you're already maxed out, see if there are ways to cut back on expenses. If you normally go for a daily coffee run, brew your own java at home or make it a weekly luxury. Call your utility, cable and phone companies every few months to see if you qualify for any savings or discounts.
Separate Your Wants From Your Needs
If you're looking to stay out of debt, you need to put purchases into two categories. These can include the wants and those that are necessary. When it comes time to pay for the item, ask yourself which category the merchandise falls into. If it's something whimsical, give it the 48-hour waiting rule. This allows you time to determine if the purchase is actually needed.
Refrain from Using Credit Cards
If you have your credit cards handy, it can be easy to whip them out and make purchases. But this is not a good strategy for those who wish to live within their monetary means. When you implement a budget, forego all credit cards when paying bills. In addition to being unreliable, you may not have the luxury to charge items if the company closes your credit account unexpectedly.
Save Money for Large Purchases
Credit cards are too easily accessible to consumers, especially if your available credit is excessive. If you can't afford large purchases such as a laptop or T.V. and need to put it on a credit card, save up for the items instead. Simply determine the amount of money you'll need for the extravagance and place the cash in a special bank account. But if you're unable to put enough money away, you can't afford the item.
Find Ways to Add to Your Income
If your budget is at its limits, and your expenses exceed your current income, you need to find ways to bring in more money. If you've set up your tax forms to get a sizeable refund at the end of the year, you can revise your withholding forms. When done, you'll see additional money on pay day. You can also reassess your disability, health and other employee benefits. If the job market is great in your area, and you have the experience to back up a good resume, you may want to market yourself for a higher paying job. You may also want to secure a second job to assist in paying additional expenses. Thanks to the Internet, you may be able to find additional employment as a freelance writer, customer service rep, online professor, tutor or social media evaluator.
Prepare for Emergencies
Emergencies are going to flare up no matter where you are in life. It's important to start an emergency savings fund to be used for unexpected issues such as car repairs, household maintenance or the loss of a job. With sufficient cash set aside in a special reserve account, you also won't have to worry about using credit cards and racking up large sums of debt. Aim for at least 3 months of living expenses at the start.
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