There are various benefits of living below your means. You can save up for your future faster when you commit to it. You can also buy the properties you have been dreaming about. You can feel secured in times of crisis when you have more than enough that is saved up. You can also earn in a passive income when you invested the amounts you saved.
How to live below your means?
1. Sacrificing Wants and Choosing Needs
It is easy to get caught up buying things and consuming foods that you don’t really need. Always consider the health benefits you would gain when buying food. Also if you need a means of transportation, consider your financial capabilities. Do you really need a new car that loses percentage of its value when you buy it? Can you buy a lower priced car with some mileage? If we want to be successful in living below our means, the first step is choosing our needs.
2. Cook Your Own Food
If you haven’t started doing this yet, give it a try! It is awesome activity that you can create your own dish from scratch. You can watch some YouTube videos as a guide or you can just experiment and mix all the ingredients to your liking. The food tastes well and it also gives you something to be excited about doing during the day.
If you are working in an office space, you can also bring your own snack and lunch. This way, your savings rate will increase and you can have funds to invest more on shares that you pick!
3. Watch Free Videos on Investing and Finance Guides
You might enjoy watching videos to increase your financial literacy. When you are knowledgeable about a subject, it becomes easier to do the right things to reach your goals. You can follow people that talks about investing and learn on how they do it. You will also learn from their mistakes.
It can also be your hobby to watch videos on YouTube so why not choose something that can add value to your life? There are communities talking about financial independence, savings, investing, stock market and many topics that you can dive into. Just be open to receive the free teachings from these communities. Try to pick some of their lessons that you can apply in your own financial journey.
4. Read Books that discuss Finances
This activity can be as free as watching a YouTube video. Last December, I read a book that I downloaded online. I gained alot of knowledge from it. After reading the book, I applied what I learned and put aside 10% of everything I earn into my passbook account.
The book is “The Richest Man in Babylon”, you can read it for three days or even just a day if you want to finish it in one sitting.
It will give you insight that you can pay yourself first before you pay for the services of others. You can also learn on how to pay your debt by setting aside 20% of what you earn. You will learn on how to live with 70% of your income.
I save up more than 30% of my income. I use automatic savings account and fund transfer so that I don’t need to touch the money. Your goals may vary, but you can pick some tips from a book and use it to achieve them.
5. Walk and Exercise
Walking to your work can be an option if you don’t have a car to drive. If your workplace is just a walking distance from your home, always choose to walk. Walking is a form of exercise and it can boost your energy before work. If you will buy some groceries, you can walk instead of using public vehicles. You are saving some money while keeping yourself healthy too.
I like exercising before going to work. Some days I would wake up at 5:30 am and go for a jog till 6 am. I do some stretching too in the morning.
You can choose what type of activity (yoga, meditation, caring for plants, jogging, biking, etc.) that you can start your day with.
6. List Down the Things that You Will Buy
There are great deals in a grocery store. There are a whole wide options for a product. You can have a prepared list of things that you need to buy before going to that store. This list can help you not to buy the things that were inviting but wasn’t really needed at home.
I list the foods that I really like. I pick the goods in my list and make lesser decisions that way. I also don’t go to the mall on Weekends unless I need to purchase something.
It is all about your priorities in life. Do you want to achieve your financial goals? Do you want to get that item today through credit card debt?
I also have a credit card, but since I activated it I don’t really use it to purchase anything. I had it for emergency purposes wherein I can withdraw money from any ATM. I may also use it if I have some important purchase.
I also have a three year long debt. It is salary deducted and I can be sure it is paid on time.
I used the amount from it wisely and I don’t see myself getting more debts.
7. Change Your Mindset about Money
Money is not evil. Money is not about greed. Money is a tool that you can use to bring in more money in your life. Money is what you need in times of emergency. Money can be used to pay your bills and debt on time. Money can also give you experience on stock trading, investing and saving.
Always think about ways on how you can make your money grow. Use money to buy your dream properties, help people, invest and see it compound over the years.
Living below your means is choosing to live with intention. You like to increase your savings rate so you can have the option to invest or save, to work or retire, and to not lack or have millions.