Identifying the total amount of money you earn per month versus the amount you spend is the first step to consider. Here are more tips to get you through if you want to live within your means without feeling limited in one way or the other:
The envelope method
Typically, this method employs the use of envelopes to help in money management. Once you get your pay, keep records and receipts of how you spend the money. Come the next month, have all your expenses in one column and the amounts used on them. In another column, list basic needs only. These include things you really need to navigate through the month, such as food, rent, transport. Once this is done, have envelopes labelled with the needs and put the cash you will need inside, for example sh5000 on groceries. You will stop spending on an item once the cash in its envelope is finished.
Is it necessary?
Living within your means does not mean being so cautious that you end up depressing yourself. It simply means conducting a self evaluation and knowing what it is exactly you need. It means you do not live from paycheck to paycheck, or getting losses in your salary. According to Mercy Muthoka, a financial planner,
“If you are buying a car, do not get a fuel guzzler on loan just to look cool if you can buy a small budget car that will not puncture your pockets.”
“The trick is to cut your needs and wants into the right size.” She adds.
Pressure to fit in
In order to live comfortably within your means, you have to resist the pressure to fit in. To avoid depressing yourself financially, you can opt for saving on an item instead of purchasing it on credit. Apart from saving yourself the pressure of repaying, you will have built yourself a money saving method that is goal oriented.
While caught up in all this, do not succumb to living below your income. According to financial analyst and trainer, Reuben Kioko,
“Living below your means will give you additional cash savings. But you can accelerate your drive towards financial independence by finding additional sources of income. These could be additional careers or side hustles.”