Many of us have heard the age-old sayings, “Spend less than what you make” or “Live within your means.” We obviously need a revamp. Not only must we combat inflation and stagnant wages, but we also need to build generational wealth. So, what’s the answer?
In our guide to living to grow your means, we share strategies to better balance your spending, find spending alternatives, and take action to grow your wealth. Let’s get into it!
Balancing Spending
Let’s run through the most important things to keep in mind when you are looking to balance your spending:
1. Know Your Income and Expenses
Start by understanding your financial picture. Make a list of your income sources and all your monthly bills. This will help you see where your money is going.
2. Track Your Expenses
Use budgeting apps or online tools to track your spending. It’s essential to monitor your spending to ensure you stay within your budget. Leverage our Money Management tool to level up your point of view on your spending habits and trends!
3. Separate Wants and Needs
Distinguish between wants and needs before making purchases. Implement the 48-hour rule to reduce impulse buying and make more thoughtful spending decisions. By delaying the purchase for 48 hours before you buy that fancy jacket, you may realize you don’t need that jacket.
4. Don’t Compete
Avoid comparing your lifestyle to others. Just because your friends or neighbors have certain possessions doesn’t mean you should follow suit. Stay in the lane of financial responsibility. In the long run, you will thank yourself for making choices tailored to your needs.
6. Save Money Wherever Possible
Reduce expenses by being a savvy shopper. Create a grocery list and look for sales and bulk items. Set a budget for hobbies and stick to it. Bring lunch from home to save on dining out during your lunch hour. Consider buying secondhand.
Don’t let anyone pressure you into overspending. Your budget is YOUR budget.
7. Cut Down on Expenses
Reevaluate recurring expenses like gym memberships, hair and nail salon visits, cable TV, and cell phone plans. Cancel unused services and negotiate better deals for those you need.
Grow Your Means
Now that we understand how to balance our means each month, we can look at how we can grow any remaining income left over. Make sure that saving is a key part of your ambitions.
8. Savings Where Possible
Life gets in the way and many times makes it hard to save. When possible, aim to save 10% of your income each month across your savings accounts as a rule of thumb. Yes, make sure you have several savings set up to help you organize your goals and keep them separate.
9. Seek Side Income
Side income can provide a significant financial boost. Consider a side hustle, freelance gigs, starting a small business that aligns with your skills and interests, or even referring a friend to OneUnited Bank for up to $1,000*/month! This extra income can be used to grow your wealth and achieve financial goals. Your side business can always help you weather the storm of any financial crisis or layoffs as well!
10. Distill The Myth
Living within your means is all about enjoying life at your level of lifestyle. You don’t have to deprive yourself. You simply budget those food deliveries and takeout meals responsibly and understand what you have to work with!
