Look around today and it seems at if “living within your means” has fallen out of fashion, with the many people seemingly intent on getting into as much debt as possible. Regardless of how much someone actually takes home in their paycheck it never seems to be enough.
Credit card debt, overdrawn current accounts and high interest bank loans are the order of the day. This type of financial behavior is obviously unsustainable and we’re starting to see the consequences come to the surface as the Credit Crunch begins to bite.
Learning to live cheaply may sound unappealing, but if you are to secure a life without financial worries then living within your means now will greatly enhance your position in the future. To some people the very thought of drawing in their spending is enough to bring them out in a cold sweat but start to exercise a little self control in your financial life you’ll find that its much easier than you anticipated.
It is often surprising how much money we actually throw away on a daily basis, small items which we buy without thinking add up to a huge expensive over the year. If you want to learn to live cheaply, start by keeping an eye on everything you spend your money on for a month, then begin to cut out some of the non-essential items from your daily routine.
When you get to the stage that you are spending less than you bring in each month you should start to learn to invest money in your future. I always advise my clients to take the first 10% of their wage and to use it to “pay themselves first” by putting the money into wise investments. This may seem like a pointless task if you have a small income but with the miracle of compounding interest the money you start saving today will grow at an extraordinary rate, giving you a comfortable financial cushion in days to come.
When the time comes that you have a financial emergency or you are looking to retire, you will be thankful that you took the first step toward saving for your future today.