Dealing with money is a fact of life. Whether it’s buying groceries, paying your rent or mortgage, or going on a fun vacation, you need to have money to spend or take on a loan.
Of course, the problem with taking on a loan is that borrowing money isn’t free. Whether you get a mortgage, car loan, credit card, or personal loan, you’ll wind up paying interest and fees for every dollar that you borrow. If you’re not careful and live too far above your means, you could find yourself having trouble making ends meet at the end of the month.
If you’re looking to do better at managing your money and living below your means, here are some helpful tips that you can use.
6 Easy Ways to Spend Less than You Make
1. Increase Your Means with a Side Hustle
One of the most obvious ways to live below your means is to simply increase your means. That means making more money, now. Easier said than done, right?
While there are many criticisms of the modern gig economy, one of the benefits of it is that it’s made finding a side hustle easier than ever. There are all sorts of things that you can do to make some extra cash in your free time. You could drive for Uber, pet sit for Rover, take market research surveys, sell your old stuff on eBay, and more.
If you’re looking to really add to your income, you can get more creative and try leveraging your other skills. Take up writing and try to find some freelance writing clients. Start a blog and share your favorite recipes, parenting tips, or photos. Buy a nice microphone and record a podcast or stream yourself playing your favorite video games and build a fan base.
Whatever you do, there are more ways than ever to make money in your spare time. The more money that you have, the more that you can spend without living above your means, though you should still put some effort into trying to control your spending.
2. Make a Grocery List before You Go Shopping
After housing, one of the biggest expenditures for any American family is food. In 2017, the average household spent more than $4,300 per year on food consumed at home. That’s enough money spent on food to max out your IRA or pay a few months’ rent.
One of the biggest culprits when it comes to spending too much money on food is failing to make a list before you go shopping for groceries. You’ll get to the store without a clear idea what you’re looking to buy and wind up putting anything that catches your eye in your cart. Before you know it, you have all sorts of junk food, desserts, and frozen meals that you weren’t planning to buy.
Before you leave to go grocery shopping, take the time to come up with a list of what you need. Whether you shop every few days, once a week, or more or less often, plan to buy only what you need to get you to the next time that you go shopping. The less you buy, the less food that you’ll have in the house that could spoil. On top of that, by planning ahead, you’ll help yourself avoid the temptation of buying things that you don’t need, which can save you a lot in the long run.
3. Give Cooking a Try
On top of the $4,300 in food eaten at home, the average household spends more than $3,300 on food that they eat outside the home. That includes fast food, convenience store stops, and restaurant meals.
While everyone likes a nice meal at a fancy restaurant or a quick rest stop snack on a road trip, eating out regularly, for example, multiple lunches during the work week, can be a huge drain on your budget.
To help avoid the temptation to eat out so often try to learn a few recipes and give cooking a try. Cooking can be as simple as following a recipe and it’s easy to find fun and unique recipes online. Make larger helpings and you can package the leftovers up and you can bring them to work or eat them when you don’t have the time or don’t feel like cooking.
This goes hand in hand with planning your grocery list. Try meal planning for a week and then putting only what you need to make those recipes on your shopping list. You can encourage yourself to cook and save money at the same time.
4. Get a Prepaid Phone Plan
Everyone needs a cell phone. It’s a fact of modern life, but they can be incredibly expensive. Some phone plans for just one person can run $50, $60, or even $100 each month. If you use a lot of data and go over your limit for the month, you could wind up paying huge fees for your overages.
One way to save money on your phone plan, and avoid unexpected fees, is by signing up for a prepaid cell phone plan. The plans usually include unlimited talk and text, but what everyone really worries about these days is data, right?
Surprisingly, many providers offer prepaid plans that offer data at a far lower price per GB than their typical plans. You can also save even more by putting multiple lines on one plan, signing up for automatic payments, or taking advantage of other offers.
You have to pay upfront, but you get way more bang for your buck and don’t have to worry about unexpected charges.
5. Wait On Big or Expensive Purchases
People make big or expensive purchases without much thinking or planning all the time, but these purchases are some of the best opportunities to save a lot of money. Think about it this way: saving 10% of a $10 transaction is nice, but it only puts $1 back in your pocket. Saving 10% on a $1,000 transaction puts $100 back in your pocket.
If you want to make a big purchase, like tickets for a vacation, a new TV, a car, or similar, take some time to think about whether you really want to make the purchase. If you’re certain that you want to make the purchase, take some time to try and find the best deal. Wait for a big sale like Black Friday or try to find a coupon or financing deal that can help drive down the overall cost.
When it comes to the big purchases, every small savings helps.
6. Build a Budget and Stick to It
One of the hardest things to do, but the number one way to live below your means is to build a budget and stick to it. So long as you budget to spend less than you make, this will ensure that you live below your means.
Building a budget is a multi-step process that is almost never completely finished. To get started, you should take the time to look at your past few months’ expenses, to get an idea for how much you spend in a typical month, and what you spend your money on. While you can go over all of your paper receipts and try to make sense of it yourself, an app like Mint or You Need a Budget will come in handy here, handling the expense tracking and categorization for you.
Once you know how much you spend in the average month, you can compare it against your income. Are you spending less than you make? If so, you’re already living below your means. If you aren’t you have to make the hard decision about what type of spending you want to reduce. Will you spend less on food at restaurants and drinks out? Will you give up your monthly visit to the spa? Whatever it is, you’ll have to choose areas to reduce your spending.
Once you’ve built a budget that has less money going out than is coming in, you have to stick to it. Again, apps like You Need a Budget or Mint can help her by letting you import your budget goals and automatically tracking your spending each month.
As time passes, look at how well you’re keeping to your budget. You might find that you’re spending less than expected or more than your target spending level. You may notice that you’re spending far more in certain categories than you thought you would. If you notice these types of things, adjust your budget to reflect the changes, so long as your total budgeted expenses are less than your income.
Your budget should be a living thing that you adjust as needed, with the constant goal being deploying your money in the way that meets your needs and makes your happiest, while still living below your means.
Make It Happen
Living below your means can be difficult, but it’s an essential part of avoiding debt and staying in control of your financial life. Follow these tips and be mindful of your spending, and you can get on the path toward living below your means.