Wednesday, May 16, 2012

To Get Ahead - Living Within Your Means Just Doesn't Cut It

"To Get Ahead - Living Within Your Means Just Doesn't Cut It"," Many people try to give others advice on how to get ahead in the world and one of the first things they tell you is to live within your means.
 The only way to get ahead financially is by living below your means.
 Knowing how to make a budget is a very important part of getting your finances in order.
 By setting up a budget and defining your goals you will then have to come up with a plan to fallow so you can successfully achieve your goals.

If you have amassed a sizable credit card debt you are living beyond your means right now unless some kind of medical emergency came up and that is the reason for the debt.
 Debt is something that you do not want to keep because you end up paying a lot more than what you borrowed by the time you pay everything off.
 That is good because the life style changes you are about to go though will not be as dramatic as someone who is living beyond there means.

The fist thing you should do if you want to get out of debt or start a savings plan is learn how to make a budget.
 All you need to do is take a month and record everything you spend your money on.
 It is best to do this daily so you do not forget what the transactions were for but once a week can be good enough.
 Any purchase you made with cash from money you take out of an ATM you will need to get a receipt for and save it.

When you have it all written down on a peace of paper or on the computer it is time to start categorizing them.
 If you do not have a program for budgeting you will have to come up with categories yourself.
 Take each thing that you spent money on and put it under one of the categories you choose to use along with how much it cost.
 Now it is time to find areas were you can reduce your spending.
 Make a new list with the same categories but instead of putting everything you spent money on under them only put the things you expect to need to spend money on.
 At the bottom of the paper next to where you put the total money you expect to spend put how much money you expect to make that month.
 Now you have to plan ways to stick to your budget.
 Starting to bring your own lunch and coffee in a thermos to work will definitely save you a lot of money.
 You do not have to quit your social life totally but you can slow it down a little bit.
 Just have everyone bring something so the cost is spread out between you all just like when you go to the bars.

You need to find a place to live that is more affordable then the place you are in right now.
 By having a roommate you can reduce your monthly housing payment by up to half along with your utility bills.
 When you pick a roommate you will have to ensure it is someone who is financial responsible and willing to sign the lease with you.
 This can help out with your house payments a little bit each month.
 You are not trying to cut down your housing expenses so you have more money to spend you are doing it so you can start paying off debt or build up a savings.
 If you are paying for a vehicle for five years you cannot afford the vehicle you have.
 If you cannot pay off a vehicle in two or three years you need to look for a cheaper vehicle.
 As long as you do not live in the Snow Belt where you need a four wheel drive and do not rely on hauling things with your vehicle for work purposes you have no need of a car that costs more than $15,000 brand new.
 The biggest problem people have buying a used car is they are unable to get money together for a down payment so they go with a new car because they can get the whole thing financed.
 If you currently have a new car you still owe a lot of money on it go to the dealer you bought it from and see if you can reduce your payments by trading it in for a cheaper vehicle or go to another dealer and see what they can do for you.

By not being the one trying to keep up with the neighbor you will probably end up being in better shape than they are later on down the road.
 A budget is not something that is going to fix your financial situation in a month or even a year.
 You need to do things smart like if you pay long distance for phone calls it is time for you to get a different phone carrier because most places do not charge long distance any more for phone calls inside of the U.
 and sometimes even Canada.
 A cell phone comes free with a service plan these days and there is no need to pay for internet access on your cell phone if you have a computer and internet access at home.
 A computer is not something you have to upgrade every year.
 The only thing I recommend not going cheep on is the virus software on your computer.

By paying of your debt and setting a small amount aside in savings to build up an emergency fund you will be on your way to financial stability.
 Once you have your debt under control and by under control I mean you do not have anything on your credit cards that can't be paid off in a month and you are driving a car that you will have paid off in three years or less.
 This can be either with CD's, Mutual Funds, Savings Account, and Stocks, what ever you know the most about.
 The key is getting to the point you can start saving money.
 At the very least set up a savings account with a bank that is FDIC insured.
 The only thing you have to do is stay disciplined and not stray to far from you budget.

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