Title: 7 Steps to Stop Living Beyond your Means and Start Breaking Money Habits
7 Steps to Stop Living Beyond Your Means and Break Money Habits
Are you guilty of spending more money than you make and getting trapped in debt? Here we provide 7 simple steps to stop living beyond your means and begin building strong, lasting money habits.
1. Assess Your Financial Situation
Take a step back and assess your financial situation. How much are you earning each month? How much are you spending? Are your average expenses exceeding your average earnings?
2. Eliminate Unnecessary Expenses
If the numbers show that you’re spending more than you make, it’s time to start cutting back on your expenses. That could mean doing away with non-essential spending such as shuttering your cable TV for a few months, eating out less often, or skipping the latest designer trends.
3. Understand the Price You’re Willing to Pay
Before you make those almost-necessary purchases, figure out the price you’re willing to pay. That way, you won’t be tempted by full-price items but look out for deals and sale items instead.
4. Create a Monthly Spending Plan
Recording how much you plan on spending each month is an excellent way to keep on top of your budget. You can use budget-tracking tools or do it through an Excel spreadsheet, paper, and pencil.
5. Boost Your Earnings
If all of your expenses exceed your current earnings, you may want to consider taking on some extra work to increase your income. By doing so, you’ll find yourself with a healthy surplus at the end of every month.
6. Incorporate a Savings Plan
Take some of your income and set it aside in a savings account so you can build up an emergency fund (ideally, that should equal two to three months’ worth of living expenses). Doing so will provide you with a safety net in case of financial issues.
7. Break the Bad Money Cycle
Once you understand how to save money and apply it towards paying off credit card balances, you can break the bad money cycle and start smart fiscal habits.
Cutting back on unnecessary expenses and making the right financial decisions can lead to a bright financial future. So take the time today to assess your finances and create better money habits.