Live Within Your Means & Thrive

Reign in Your Recurring Expenses

Here’s the thing, the more you pay out to others, the less you have left for yourself. You are either investing in your own life goals and dreams or somebody else’s. Know who you is on your payroll and why. Living within your means requires a little bit of planning and regular reviews.

If you are struggling to make ends meet each month, begin by listing out your regular recurring monthly bills. These are the bills you are obligated to pay – such as mortgage, utilities or loan payments. Take a close look at each one. Are they essential? What influences the cost of each service? Your heating and cooling bills may be influenced by insulation, leaks or temperature settings. Focus on what you can control. Your loans may be eligible for lower rates if your credit and debt-to-income have improved.

Keep Reducing Your Expense Ratio

How much of every dollar that you earn is actually working for you? What value is it providing to you now or to your future? Living within your means allows you to reduce financial anxiety and stress in the long run. Set a goal to reduce your monthly expenses below 70% of your actual take home pay (net income). Your monthly expenses should include contributions to a 401k, IRA or some form of retirement account. Start where you can and increase over time.

Think about your income in blocks. Strive to keep any housing related expenses under 30% of your income. That includes house payments, wifi, utilities, insurance and maintenance. Another block of 30% – 40% should cover your remaining expenses. The third block is what you have available to invest in yourself, your goals and your interests. As your income increases, avoid increasing expenses. Focus instead on increasing your savings, investments and assets.

Give Yourself Financial Freedom

By living within your means you will be able to have a positive cash flow. It will provide you with more choices and opportunities. As you build your savings for the things that matter most, you will experience a greater sense of control over your life and your future. Rather than living to work, you will be working to live a life you love.

If you need help putting a plan together or getting started, reach out for information on our 1:1 Financial Coaching. We want to see you thrive!

Spend wisely. Save well. Find your Financial Zen.

Image courtesy of pixaby.

About the Author

Ladybug Collaborative Inc

We bring clarity to personal financial management by providing the most accurate snapshot of your finances. Clarify * Simplify * Equip

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