5 Ways to Live Below Your Means (and Why You Should)
As a nation, we are knee deep in debt. In fact, the average Maryland resident is carrying around $7,000 in credit card debt alone. Add in the mortgage, some car payments, and student loans, and it’s easy to see that consumers are barely hanging on. The problem, according to many financial experts, is that people are spreading their money too thin, leaving very little to save and get out of debt with.
“If you put all your earnings into your debt then you will have a difficult time ever getting ahead or saving for a decent retirement,” explains Brad Glickman, CERTIFIED FINANCIAL PLANNER Professional, and President of Bernard R. Wolfe & Associates, Inc., a company specializing in offering wealth management strategies. “The good news is that it is never too late to make some changes that can have a meaningful, and lasting, impact.”
One of the best ways to do this is for consumers to learn to live below their means. When they do this, they will be able to pay down debt, build an emergency reserve, save for retirement, and be able to obtain some stress relief along the way.
Here are five ways that consumers can live below their means:
1. Leave funding at home. If you set out to go to the mall or another place to shop, consider taking only the amount of money needed to purchase what you are going for. Leave the rest of the money, and the credit cards, at home. That way, if you see something, you will have time to really mull over the purchase and go back if you want it, instead of giving in to impulse purchases.
2. Wait for Last Minute Deals. Everyone enjoys having a meal out once in a while even if they are on a tight budget. Many “Living Social” or “Groupon” type deals may offer great discounts on restaurants or other entertainment in your area. You can also book inexpensive vacations through these types of deals as well, so tune in when possible for these deals.
3. Forget the Jones’. Trying to keep up with the people next door, or down the block, can be devastating to one’s confidence, as well as pocket book. Forget what others drive, wear, or live in. Focus on what makes you and your family happy, and it will keep more money in your pocket.
4. Buy used vehicles. The moment you drive a car off the lot, you lose part of the value. Buying a used car with low mileage can save you thousands and help lower overall monthly expenses.
5. Automate Savings. Set up an automatic transfer to your savings or investment accounts the day after you get paid. It’s much harder to spend money that you don’t notice you have. This removes the temptation not to save and to spend instead.
“These are just some of the many ways that people can live beyond their means in order to really get ahead,” added Glickman. “We have helped many people get on the right track to doing this, and their finances, both now and in the future, look a whole lot brighter.”
To learn more about Bernard R. Wolfe & Associates, Inc., visit the website at www.bernardwolfe.com.
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Source for stats:Fox Business. 10 states with the worst mortgage debt. January 2012. <http://www.foxbusiness.com/personal-finance/2012/01/23/ten-states-with-worst-mortgage-debt/