Money is an always a delicate issue to discuss, probably because of its indispensable role in the affairs of people. Likewise, developing the right money habits while killing off the bad ones is no fun. In fact, it is next to the impossible to many. Nevertheless, the first step to financial independence is living within one’s means; curtailing your expenses, avoiding debts, saving a percentage of your income are some of the things you will need to adapt to.
It is a proven fact that more money (wealth) doesn’t guarantee happiness but living within one’s means does just that. I am practically giving you some light at the end of your tunnel. Fulfillment in your finances is within your reach. These principles below will certainly help you find that delicate balance between fiscal responsibility and enjoyment of some luxuries.
How to Live on One Income
DO DETAILED BOOK-KEEPING
This involves keeping a proper track of your income and expenses. This is so vital because you cannot spend what you don’t have. It is a ‘garbage in- garbage out’ thing. If you don’t do this, you will end up spending much cash on frivolities and could even end up running into debt. You need to know how much you are bringing home each month, how it moves out, what it goes for, and what it shouldn’t go for. This will help you set the right priorities in your spending.
SPEND LESS THAN YOUR INCOME
As difficult as it sounds, you definitely need to do this. Your book-keeping practice will help you achieve this. Eliminating the expenditures that are at the bottom of the list of priorities is the key. You must only buy what you truly need. Also learn to use what you have instead of shopping emotionally.
SAVE AT LEAST 10% OF YOUR INCOME MONTHLY
Discipline and determination are the name of game here. If you love your future, and that of your family, you will do it. 10% savings monthly leaves you with an unbelievable pile of cash after many years. You can personally save for your old age, especially after all the recent pension scams. It is called ‘buying your tomorrow with your today’. You should save your raises in salaries, extra profits in business, and free cash.
AVOID CONSUMER’S DEBT LIKE A PLAGUE
Debts are like getting stuck in a swamp, the harder you struggle to get out, the deeper you sink. Why would the banks willingly give out loans if they wouldn’t make huge interests off the debtors?
Always buy with cash. Never spend money you don’t have. Never eat your future today. Avoid using credit cards and over-drafts. Endeavor to spend only what you have. Instead of taking loans, why not postpone that need and start saving for it; at least you would avoid the interest that you would have paid the bank, and you will have peace.
FIGHT THE PARKINSON’S LAW
One of the laws of Parkinson states that for any increase in income, there arises an equivalent increase in expenditure. It seems true, doesn’t it? You can overcome this law because you are in control. Yes you can and you will, because it’s your world and not Parkinson’s. Never increase your budget unnecessarily because of extra income. Saving your raises or at least a part of it can help you in the long run.
GIVE OUT TO CHARITY
The habit of charity has some positive after-effects. You need to believe this, because those who do give say so. I do give and I concur to it. Among all others, here is one. Giving to the needy makes you forget your own worries when you see the plights of the less-privileged. You begin to exercise more contentment, and value what you have.
These tips will greatly benefit you if practiced, correctly. Have any other tips you like to share? Leave them in the comments.