The last 12 months have been devastating to a lot of budgets. All around the world, the coronavirus crisis and other external forces have wreaked havoc on personal finances. So much so that many people now find themselves having to live within somewhat reduced means. They are discovering just how hard living within their means can be.
The problem itself is nothing new. People have had trouble living within their means for generations. It has been exacerbated in more recent generations by our obsession with consumerism. The good news is that living within one’s means is entirely possible. Millions of people do it. But it does require a certain mindset.
If you are struggling financially right now, here are five tips for living within your means:
1. Reuse and Repurpose
Most posts of this nature start with a suggestion to create a budget. This post will get there eventually. We start with repurposing and reusing because the practice typifies the mindset required to live within your means. Take rechargeable batteries, for example.
USB rechargeable batteries from Pale Blue Earth are built on lithium-ion technology. They do cost more at the cash register – up to five times more – but they can be recharged a thousand times or more. So in the long run, they actually cost less.
The whole idea of reuse and repurpose is to stop spending money needlessly. Why buy alkaline batteries when lithium-ion products ultimately cost less? Why use disposable plates and cups when washing your dishes will save you a ton? Why throw away plastic food containers and then turn around and spend money on new kitchen storage solutions?
2. Learn to Cook
Food is a major expense for most families. Here’s the thing: you are spending a lot more than you have to if you’re not cooking for yourself. Going to restaurants and purchasing prepared meals from the grocery store is costing a lot more money than you know. Buying the ingredients and cooking yourself would cost a lot less.
3. Resist the Brand of Temptation
Some of us insist on buying only the top brands for all the products we purchase. Doing so is a good strategy in some cases, but not all. For example, consider your sunglasses. Spending $350 on a brand like Ray-Ban seems kind of foolish when you can spend less than $50 on an off-brand that offers equal quality. Why pay so much more just for a fancy name?
4. Compare Everything
One of the hallmarks of people who live within their means is a willingness to compare everything. Whether it is car insurance, clothing, or the new computer your child needs for school, don’t buy the first thing you find. Do your homework. Compare prices and features, read reviews, etc. Commit yourself to finding the best possible price before you purchase. And by the way, that even includes groceries.
5. Create and Live on a Budget
The final tip is to create and live on a budget. This could be the most important aspect to living within your means. A budget acts as both a guideline and a record. With it, you track your income versus your expenditures. If the latter is greater than the former, you know you need to either reduce your spending, increase your income, or both.
Living within your means is not impossible. Anyone can do it. It requires discipline, work and, if you have never done it before, at least a bit of practice. Once you master living within your means, you’ll be surprised by how much freer you feel. It is a wonderful thing.