Living Within your Means: 5 Top Tips to Manage your Finances

It’s not uncommon for people to struggle to live within their means. With many middle-class Americans living paycheck-to-paycheck, many people would like to know more about how they can make their money go further. 

Credit cards, savings, loans, and debt loads all play into your current financial situation in your life, but a few of these items like credit cards and debt allow people to purchase more than their paycheck would allow. 

If you want to learn how to stay within your financial means while still enjoying your life, follow these five top tips to manage your finances.

1. Know how much you make

This one might confuse people, but there are plenty of people who aren’t entirely sure how much money they’re bringing in. Whether it’s in dividends or interest, a salary, or even the extra income you get from a hobby side hustle, all of this goes into your income. Since most bills are paid on a monthly basis, you’ll want to know exactly how much money you have coming in. 

2. Reduce how much you spend

Once you know how much you make and how much your bills are, it’s time to look for ways to reduce what you’re spending. This isn’t about giving up everything you enjoy and scraping by while eating only beans. Reducing how much you spend is about locating any impulse buys you often fall victim to or by calling the companies that provide you with cable TV and asking for discounts. 

3. Stop relying on your credit cards

Credit cards can be very dangerous. People often fall victim to thinking that their credit cards are a form of extra cash but in reality, all you are doing when you use your credit card is owing a major corporation money. And a corporation that will charge you insane amounts of interest (often over 20%). You should never use your credit cards to pay bills, for example, because you will unconsciously think that you have already paid the bill and it will surprise you at the end of your money on your credit card bill. Credit cards are also unreliable. Did you know that your credit card company can decrease your credit limit or even close down you card at any moment, without warning? 

4. Don’t try to keep up with anyone

We often fall victim to comparing our homes, cars, and clothes to other people. We assume that if we own a bigger home or flashier car, we will be happier, but it’s well established that people who strive to be like others are never fully satisfied – even if they reach their goal. Only use your credit cards for short term purchases, and never for anything you can’t pay off that month. And especially don’t use it to buy something because an Influencer told you to.

5. Don’t buy into an MLM to make cash

Multi-level marketing companies may look successful to an outsider (especially one looking to make more cash quickly) but they are a dangerous place to sink money into. Law blogs like lawalways have delved into the strange, rarely financial sound inner workings of MLMs.