Do you experience needing to buy something important but realize you don’t have money for it? And then you remember that you spent your hard-earned money on something insignificant that left you financially tied just the other day. It’s frustrating, right? It’s not until you experience being broke that you want so much to break free from your financial struggle. Here are our eight tips on how to stop living beyond your means and never be broke again
1. Track Your Spending
Are you tracking your spending to know where your hard-earned money goes? If you’re not doing that, you will not know when you are spending uncontrollably or buying things on impulse. You have to be aware of where you spend your money. Start tracking your expenses now and start having financial freedom. Whether you use a budgeting app or a normal notebook doesn’t matter. The goal is to find out where you need to cut back on things like entertainment, dining out, or subscriptions you don’t even need. Make it a habit also to check your monthly statement of account to know if there are unauthorized charges that you need to know.
2. Create a Realistic Budget
You may not be aware that living paycheck to paycheck and struggling with paying your monthly bills means you do not have a realistic budget. So once you track your spending and can adjust accordingly, you can now create a realistic budget. This will give you direction on how to stop living beyond your means. Make a budget that aligns with your monthly income and expenses. Allocate necessary funds for important needs, savings, and credit card payments. Stick to this budget and try not to spend on anything that is not part of your plan. Good financial habits will lead to a life free from financial struggles.
3. Build an Emergency Fund
Financial instability means you rely on using your credit card or filing a loan when there are emergencies and other unexpected expenses. Avoiding financial mistakes like this is possible and attainable if you know your financial needs. To start your journey toward financial stability, all you have to do is pay attention to building your emergency funds. These funds will then cover your unexpected expenses like car repairs, appliance breakdowns, minor home renovations, natural disasters, plumbing issues, medical bills, or even job loss. Your goal is to save at least three to six months’ worth of your living expenses to cover these unexpected possibilities.
4. Invest in Yourself
Do you feel that, for some reason, you are stuck in your career and that you’re not growing anymore? Or maybe you feel you lack the skill and, therefore, have limited earning potential. What you can do about it is to invest in yourself. Try doing something more meaningful instead of buying senseless materials and splurging too much on entertainment. Invest in your education by taking courses that will increase your learning. Attend training and seminars about professional development skills. Doing these will help you advance in your career, increase your income, and elevate your financial security. Investing in yourself means investing in your future.
5. Avoid Impulse Purchases
Have you noticed your home lately? Do you see the unopened boxes you just bought from Walmart? There are also those new kitchen appliances that you don’t know where to put anymore because there are other items you purchased before that are just lying around without a space. Your home is cluttered because of your unnecessary spending. And hey, just the other day, you asked yourself how to stop living beyond your means. This is the answer – stop making impulse purchases! Start asking yourself if what you will buy is a need or want. Sleep on that question before making a decision. You’ll be thankful that you avoided impulse purchases and discovered how to stop overspending.
6. Cook More Often
The other night, you come home with takeout food. The following day, you felt like eating in a high-end restaurant, so you did. Other times, you drive through McDonalds because you want some fries and nuggets. Over time, this has become a habit and it’s not saving money. Again, this habit is not how to stop living beyond your means. What will help is when you spend time in the kitchen and cook. Take out your recipe books, prepare classic and well-loved dishes, or just cook whatever is easy for you to make. Plan your meals and make a grocery list to avoid impulse purchases at the supermarket, and remember to stick to your list. Remember, the goal is just to help you stop overspending.
7. Practice Gratitude
Your friend just bought a new iPhone. Maybe, your colleague just purchased a new Louis Vuitton Neverfull. Your neighbor just had a new car. And you, sulking in the corner, thinking you’re the least of all creation. You feel that you are so out of the league because you can’t even afford the things you see from the people around you. You focus on what you don’t have and are driven by your negative mindset. Are you dissatisfied with your current financial situation? How about you practice gratitude for what you already have? Shift your mindset and remember that material possessions do not gauge your worth. Be thankful that you are alive and well. Try to focus on yourself and not on others.
8. Seek Financial Advice
Do you think you are making poor financial decisions in life? Do you also get overwhelmed with all these adulting things of being responsible for your finances? If you answer yes, then you need a financial advisor to provide invaluable guidance about your finances and support you in managing them. A Financial Advisor will likewise help you how to build wealth through investment strategy and retirement planning. They can also give you expert advice and guidance about risk management and product selection that will provide you with ample financial products from which you can choose. Indeed, working with a financial advisor will help you to have peace of mind and achieve your financial goals.
Breaking Free From Your Financial Struggles
Remember, breaking free from financial struggles takes time and effort. Be patient with yourself and celebrate your small victories. Learning how to stop living beyond your means is the first step towards achieving that goal. Set your eye on what’s on the finish line. Give it your all, and you will surely be smiling in the end with your arms raised.