Successfully living on a budget comes down to one simple principle: the difference between needs and wants.
Your needs are fairly obvious. You need food, shelter, and clothing. You need a source of income. Emotionally speaking, humans need love and acceptance, too, though that doesn’t figure heavily into your budget. (Hint: If you’re spending money on love, you’ve got bigger issues that we’re capable of dealing with.)
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"Rather go to bed supperless than rise in debt."
- Benjamin Franklin |
In addition to these basic needs there are things that you technically don’t NEED, but that you feel like you can’t live without.
For some people, it’s cable or satellite TV. Some people simply MUST go to the movies a few times a month. Others can’t bear to live without their magazines to browse during their idle hours.
Living on a budget means determining whether an expense is simply a want or a need.
Even if it is within the “needs” category, there’s a lot of wasted money. Yes, you need food. But do you need to buy the most expensive name-brand variety at the grocery store? Of course not. You can save a fortune just by purchasing the generic versions, most of which are nearly identical in taste and quality.
You need clothing, of course. But you definitely do not need to buy new outfits every single month. Moderation and accountability are the key here.
Living on a budget also doesn’t mean you can’t have ANY fun. It doesn’t mean living on only the cheapest food you can find, never going out for entertainment, and never buying anything that’s technically more of a “want” than a “need.”
Remember, to stay healthy and happy, some diversion and entertainment is a human need, too.
The key in living on a budget is to do things in moderation. If your goal is to eliminate your debts by reducing your expenses, you ARE going to have to make some changes. It won’t happen by itself.
You’ll have to spend less on some things that you enjoy. You’ll have to eliminate some expenses altogether. You just have to figure out what’s a reasonable amount to spend on non-essentials, keeping in mind the ultimate goal: to reduce your expenses and get out of debt.
In most cases, you’ll be able to reduce how much you spend on things that aren’t that important to you anyway. Those reductions won’t hurt too much. That will soften the blow when you have to cut into some of the things you do like.
Above all else, keep your eyes squarely focused on the prize - no debts; financial freedom; true peace of mind – these rewards will keep you motivated even when small sacrifices are required.
"Credit buying is much like being drunk.
The buzz happens immediately and gives you a lift....
The hangover comes the day after.”
- Joyce Brothers |
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Debt is NOT your friend. It's not a wonderful "tool" for building wealth. That's a myth.
