frugal zeitgeist

Living Below Your Means

Posted on 05. Apr, 2009 by Dragon Sue in General Articles, Saving Money & Finances

This is a concept that has largely been forgotten since the 1930’s, and especially since the Credit Card came in to being. The banks have marketed that little piece of plastic so well that even they eventually fell for their own hype, and look where that has got them now!

Credit is just that, credit, don’t let the sugar coating banks have given the name fool you. And to get that money, money that you don’t have in your pocket right now, will cost you, big time! After all, a bank is a business, and they are there to make money, out of you, their customer, never forget that.

Every time you buy something on credit, you are not just paying the cost of the item, you are also paying for the wages of the person that made it, the wages of the person that sold it, and the wages of the people at the bank who arranged the credit. Do you really want to pay the wages of the fat cat who has ruined so many lives with their short sighted policies? I thought not.

So what is the first step to living below your means?

Sit down with a piece of blank paper, draw a line down the middle, and on the left put a heading; ‘Money in’. Underneath that write all the money you come in last month, leave nothing out. On the right put a heading; ‘Money out’, and underneath that list every single thing you paid money out for, right down to that cappuccino you had on the way in to work that day.

Now tot those two columns up. You should be able to take the total of the right hand column away from the total of the left hand column without going in to minus figures, if you can’t then you are not ‘living below your means’, and something has to change.

Everyone is different, some are happy to turn the telly off and sell it to make those two column tally, (you save on electric, eye glasses, and if you live in the UK, licence fees!), some are happy to fore go their lunches in the local deli and brown bag it instead. The decision is yours, and yours alone where you cut expenses, but if you really want to get out of debt, this is the place to start. With the money you save, you can start getting that credit card debt down and eventually gone, and I hope by this point that little piece of plastic has been cut up in to tiny pieces, and posted right back where it came from!

The principle of ‘living below your means’ is simple, never spend more than you have coming in, in any one pay period. If you can save some of your pay that is brilliant, but don’t forget, all the time that credit card bill is sitting there, it is costing you more in interest than your savings will be earning you in interest, so you will be better off getting shot of that bill before thinking of saving.

Related Posts B

1. Frugal Living
2. 5 Reasons Why Frugal Living Is Good For Your Health
3. Living in a frugal way – stop impulse spending now!
4. Frugal Living Forum
5. Shaners quick guide to living cheap – 20 frugal tips

Tags: put savings away, spend less than you earn