Recent data from the government’s statistics office show that the economy is doing great. The unemployment rate is at the lowest level it has been in 50 years and there are more job openings than employees. Wages are rising and the average weekly hours have remained relatively unchanged. Better still, the rate of inflation has been subdued.
However, statistics also show that Americans are not having the best of times. Student debt has balooned to more than $1.5 trillion. Household debt has soared to more than $13 trillion while corporate debt has grown to more than $15 trillion. Another report found that 40% of Americans cannot cover a $400 emergency. A solution to this can be living below your means. This article explains a few tips you can use to do this.
Today, everything has been subscriptionized. This means that you can find a subscription package for anything, including bones and delicious treats from Japan. Other common subscription services include Spotify for music, Netflix for TV shows and movies, Amazon Prime for shopping, and Google for online storage. Sadly, most of us don’t use all these services. Therefore, as a way of living below your means, you can cancel the subscriptions you rarely use. Alternatively, you can use the family sharing option so that you can avoid paying for a similar subscription service.
Buy a Used Car
As Americans, we love cars. We can’t live without them. Having a car provides a lot of convenience. However, do you really need that brand new car you have seen being advertised? That car will start deppreciating as soon as you drive it off the lot. Instead of buying that luxurious Tesla or Mercedes, we recommend that you buy a used car and pay it in cash. This will save you a lot of money in the long run.
Wait Before You Buy The Latest Gadget
We all love having that brand new smartphone, tablet, or television. Yes. And that smart speaker. We all watch when companies like Google and Apple are launching the products. As a person trying living below your means, you can save a lot by waiting before you buy these products. For example, the price of high quality smartphones by companies like Samsung tend to lose value as soon as they are released. In addition, you can just skip the upgrade. A good example is in the current iPhone series, which is just similar to what the previous version had.
Live in a Small House
You don’t need to live in that luxurious house in your neighborhood especially if you are leasing it. As you already know, paying rent is one of the biggest waste of money simply because you will never get back that money again. Your goal should be to buy and own your own house. To achieve this goal, you need to sacrifice quite a bit and this includes living in a small and uncomfortable house. Doing this will save you a lot of money and will help you live in your own house within a short period.
Avoid Some Luxuries
As you try living below your means, you can decide to give up some of the luxuries that don’t add any value to your life. For example, you might be a big fan of basketball, but do you need paying tickets every week to watch a game? You might be a big fan of watching movies in the big screen. But do you really need to pay tickets to watch every week? Do you want VIP tickets for events you attend? Do you want to use a meal kit like that offered by Blue Apron? These are some of the little luxuries that you can give up.
Search for Discounts
As you shop, you should always do your best to look for discounts. In this, an important rule you need to remember is that not all expensive things are usually of the best quality. In fact, if you watch Shark Tank often, you have likely seen that many of the overpriced products are usually made using less than a dollar. Therefore, you should always search for discounts.
Eat at Home
Do you need a $3 cup of coffee at Starbucks? While it is a good thing to treat yourself once in a while, you should not make it a habit of eating in restaurants or ordering food using the common apps like Uber Eats. Instead, you should form the habit of cooking at home. At the end of every month, this simple habit can save you hundreds of dollars.
Fly Economy, Stay at Cheap Hotels
If you are a traveller like me, you can save a lot of money by flying economy and staying at relatively cheap hotels. The truth is, you don’t need all that space when flying in first class. In fact, you will all arrive at the same time with those flying in the economy class. Similarly, that hotel room that is costing you $400 per night is not worth it.
Living Below Your Means Conclusions
We all love the best things in life. We love the latest gadgets, staying in expensive places, and having the latest technologies. However, to achieve all this, we need to sacrifice a bit. We need to live below our means if we are to achieve the success that we all want. By using these tips, you will be at a good position to set yourself for future success.
Crispus is a finance professional with more than a decade experience in the industry. Over the years, Crispus has written in-depth articles on leading platforms like CCN, Marketwatch, and Seeking Alpha. He also runs a Forex education and managed account company called WestEndFx.