Can We Live Within Our Means?
Can we live within our means and how? The times are hard, and economists designated the previous year as the time of economic recession. But because of rampant deficit borrowing, major economies delayed an inevitable economic crash. 2020 just started, and we experienced a range of difficulties economies continue to embrace themselves for. Every country experiences some kind of impact or downfall because of various social-political reasons.
This means that we will need to have a look at our spending habits and patterns to ensure we live within our means. It is not too difficult, it only requires a bit of discipline in our personal financial management and realignment of the way we look at things.
1. Get into the Habit of Budgeting.
Yes, budgeting sounds like a cliché now, but it is the basic principle of personal financial management. Think about it for a moment. You cannot run a country without a budget, nor can you run an organisation without creating a budget, so why do we act so carelessly when it comes to personal financial management?
Those who are in the habit of preparing monthly budgets present a clearer idea of their own income and expenditure, and thus they can make better plans about their future. To live within your means, you need to know how much you earn and how much you can spend each month. Budgeting remains one of the key aspects of financial planning.
2. Practice your Saving Capabilities.
Unless you lucky enough to have multiple income streams, you must save money to meet some of your needs. Saving once again plays a crucial part in personal financial management. If you spend every penny you earn each month, then you are likely to become indebted and fall in a vicious cycle of bad debt or a range of loans to pay off.
To avoid such an unfortunate situation, people need to realise that whatever they save today, will come handy. The more you save, the more you will have in store to meet your needs. An average person saves around 10-30% of their income. We can increase the savings rate depending on how much you prepared to change your lifestyle. It is vital to save if you want to live within your means.
3. Change your Perspective.
Budgeting and saving will only work if you have the right perspective in life. We live in a society overly involved in social media. Most people spend a considerable amount of time each day scrolling through social media feeds of their friends. The thing about social media is that it makes us feel like everyone except us live an extravagant lifestyle.
First, we need to understand that everyone has a different script in life. Second, life goes through highs and lows. There are good times, and there are bad times. If you find it hard to live within your means, it means that you are going through a temporary phase. It also means you need to plan appropriately to get out of this situation soon.
But looking at the social media feeds of our friends and people whom we follow, it makes us feel like we are missing out. This makes us spend on trips and things that we either have no need for or cannot afford.
So we need to change our perspective and understand that everyone has a different journey which they have to go through in their life. Your life becomes defined by your passions, not by what others do. If you feel you experience a tough phase in life, then this calls for some introspection, reanalysis of your strategy and refocus. Remember that good and bad times alike do not last forever.
To conclude this discussion, I must say it, that living within your means is not a difficult thing to do, it only requires a bit of introspection and personal financial management. Difficult times do not last forever all we need to do is try to make the best out of any situation we come across.