Desire and motivation are the two factors that influence human lives and how they spend. The different combinations of these two elements produce the following three lifestyles.
- Frugal lifestyle: Spend less and Save more
- Easygoing: Spend more without concern for the future
- An ideal balance: Spend and Save diligently
The third lifestyle is where ‘Living happily within Means’ exists. What does living within your means mean? Simply put, it means spending less than or equal to (and not more than) what you earn each month. For many people, it is a lot easier said than done.
Financial products and services such as credit cards, loans, savings, and even emergency funds are making it a lot easier to spend above our means. Awesome as it can be, that easygoing lifestyle isn’t sustainable at all, as in the long run, careless spending compounds and catches up to you. Your savings and access to credit will run out and when that happens, you’ll then be forced to make some radical changes or face financial ruin.
The following steps will help you manage your finances better and live happily within your means.
- Hold Yourself Accountable.
First of all, know your cash flow; How often do you get money, how much comes and what are your sources of income? Knowing your cash flow is the first step to preparing a budget that can hold you accountable. Yes. A budget is very essential. You use it to plan your expenses against our income.
We know that budgeting at times might be a stressful thing to do and it could be overwhelming. So, you could try a method called “backward budgeting” where you write down your income, then start subtracting each expense you pay each month as much as you can remember. On the off chance that you get to a negative number, at that point it shows you’re spending excessively. You can then use this to plan ahead for the next month. Also, using money tracking apps that allow you to easily input your daily spends can help you keep track of your finances. Whatever works for you, it is important to note that a budget will keep you accountable.
- Don’t be influenced by peer pressure and never buy on credit
It’s important to resist the pressure to have the same material things as the people around you, or even people on television or social media. You may be able to use loans to fake wealth for a short period of time, but you’ll pay for it later and it won’t be easy. It’s advisable to save up for purchases instead of getting them on credit. Rather than buying things on credit, set aside some cash every month until you’ve set aside enough to get those items you desire. Remember, If you can’t afford to save up for a want, then you can’t afford to buy it.
- Boost your income organically
It’s advisable to spend your money, time, and resources judiciously in looking for/acquiring new sources of income and assets.
You should also avoid wastes and unwanted expenditures. Instead of craving for more, manage what is on ground effectively or at least, declutter before acquiring. Set aside a portion of your present income as savings to meet future and emergency needs.
After all, is said and done it is important to Remember to live. It would be wise to be able to perform your duties as a contributing member of the society, without compromising the joys and pleasures of life.
This life is a one-time opportunity. Live it happily and usefully.
Social media and content analyst at Korapay.
Korapay is a cross border remittance platform focused on reducing the cost of money transfer and increasing its speed into and within Africa. Korapay allows individuals in the United States to send money within minutes to the bank account of anyone in Nigeria.