Living Well Beneath Your Means

Three Tips for Living Well Beneath Your Means

Contrary to popular opinion, the key to financial freedom is not solely based on the amount of money you bring into the household each month. It’s about learning how to manage your money and prioritize your spending. This is also known as living beneath your means.

Below, you’ll find some great suggestions for living beneath your means in order to build savings. You won’t have to move into a shoebox or completely forgo entertainment and shopping – but the tips below will help you learn how to make better spending choices.

Consider these strategies:

  1. Have a slice of humble pie. If you’re constantly in a competition with your neighbors, coworkers or friends, you’re never going to stop spending. In the back of your mind, you’ll always try to “beat” them by having the newest car, biggest house, most expensive clothing, and more.
    • Once you eject the competitiveness from your mind, you’ll be able to effectively trim the fat from your budget.
    • If you’re a smoker, now is the time to quit. If not for your health, do it for your financial future. In some states, a pack of cigarettes can cost $10. If you’re a pack-per-day smoker, you can save $300 per month by ditching this harmful habit.
    • Work with what you have. There’s no need to upgrade your car if the one you’re driving now gets you from point A to point B. If your current home isn’t to your liking, make some updates or redecorate – it’s a far less expensive fix than purchasing an extravagant estate.

 

  1. Trim your grocery budget. Coupons aren’t the only way to save money on your grocery bills (though they certainly help). You just need to be conscious of your purchases. It’s possible to feed a family of four for under $10 – with a high quality meal to boot!
    • Never go grocery shopping hungry or tired.
    • Three nights per week, cook up something very inexpensive for dinner, such as beans and rice or homemade soup. It’ll be a nice change of pace, without feeling deprived. And of course, the biggest bonus is that you’ll save money!
    • Buy Generic, when available. Almost every product out there has a generic equivalent, some of them are even made by the same companies or in the same factory as the name brand product.

 

  1. Make savings a priority. Savings isn’t optional. It’s necessary for financial emergencies – and they always come up in some form or another. Treat it as any other bill each month. Place this, as every other bill, in your budget workbook. You do have a budget workbook, don’t you?
  • If you’d like, break it up into pay periods. In order to save $800 per month in a 2-income household, each partner would have to set aside $100 per week. A $400 goal would be just $50 per week. When a savings goal is broken into manageable pieces, it’s a far less daunting figure.
  • When you’re unable to meet your savings goals, either find a way to make more money or spend less money each month. If you’re able to trim the fat from your monthly expenses, there will always be a way to meet your savings goals.
  • Budget your “fun money” as well. When you budget a set amount for unnecessary shopping trips and entertainment, you can’t shop until you drop. When the money runs out, you’re done.

 

Your entire life doesn’t need to change in order to live below your means. It’s all about minimizing your expenses where possible and refusing the urge to live larger – even if you have the means to do so. By implementing these simple tips, you can slash hundreds of dollars – if not more – off your monthly bills and stash it into your savings account!

Considering Borrowing Money From Family-Think Twice

Borrowing Money From Family can be a tricky business to say the least. When you borrow money from say, a bank, and you are unable to make your payments they will simply come after you for collateral. But what happens if you lend money to a family member and they are unable to pay you back? Are you going to go and take their car? Of course not. This is what makes lending money to family members so difficult.

If you are planning to lend money to any family members, you need to be prepared to say goodbye to that money forever. In most situations the odds of you being paid back are quite small, so you need to be aware of that. Since lending money to family members can be difficult, there are some tips to help make it easier.

  1. Never lend out money that you need or want. If you yourself are on a tight budget you can not afford to go giving money to friends and family. It may sound harsh but you have to come first, if you go broke who is going to help you? As I stated above, any money you give you need to be prepared to never get back. So if you have no money to spare, then you can not give any away.
  2. Assess the risk involved. When someone is Borrowing Money From Family they will of course tell you they will pay you back. But you need to assess the situation they are in to see if they can pay you back. Every circumstance is different, but if that family member has a history of not paying back loans or are reckless with their money, why would you lend it? Make sure they are able to pay you back, or at least make sure you know what you are getting into.
  3. Never co-sign on loans. In certain situations family members may require a co-signer for a loan. The bank may not like their situation enough to give them a lone unless they get someone to co-sign for them, and so they may turn to you. However, it is advised you do not co-sign on loans. It puts you at risk for having to pay back the money should the other person default on their payments, money you may not have.
  4. Give money freely as gifts. Seems a bit counter productive since so far I have been saying to be careful when people are Borrowing Money From Family. But that is something we forget as we age. When we are teenagers we often get money as gifts, but we really do not need it. When we grow up and actually need the money, nobody will give it to us.

Jimmy L Hancock Jr is the Owner of http://ProfitDistrict.com. Check us out anytime for marketing tips and a free subscription to our cutting edge newsletter. Check out Consumer Wealth System -> http://www.ProfitDistrict.com/?rd=wi3uZ5vu

  • Give your adult children and family members money for birthdays or holidays, if you can afford to. Not only can it help them out, but it also gives you some leverage should you ever be forced to deny them a loan. So it ultimately helps both you and your family members.

 

 

What is a Personal Loan?

What is a Personal Loan?

A personal loan is money you borrow from a lender for your own private use. The lending institution can be a bank, investment broker, or private lending company. You can apply for such a loan in your home town or on the internet. Personal loans can be used for a variety of needs including a vacation, vehicle repairs, education, medical expenses, home repairs or remodeling, legal bills, and debt consolidation.

Personal Loan or Line of Credit?

The average personal loan maximum is $15,000. The amount you are eligible for will depend on the lending institutions guidelines for such loans, your income, and your overall credit rating. A personal loan is often confused with a line of credit. The major difference between the two is that a personal loan is a lump sum amount of money issued to you by the lender. A line of credit is similar, but you have access to funds up to your credit line that you can access all at once or just what you need, when you need it.

To Be or Not to Be: Secured or Unsecured

Personal loans can be either secured or unsecured. Secured loans mean you will offer the lender some type of collateral that they can claim in the event you don’t repay the loan. This can be a vehicle, land, or other asset you own. Unsecured personal loans mean there is no collateral. The interest rates for unsecured loans are higher because there is a greater risk of non-payment.

What Should You Expect?

The terms of a personal loan are generally one to five years. The terms of your loan will depend on the lender and the amount of money you borrow. It is important that you understand the loan terms prior to accepting the funds. While a longer loan term will result in lower payments, you will end up paying more for the loan over the life of it due to the amount of interest. Keeping that in mind, only borrow the amount you need for your specific purpose and pay it back as quickly as you can. Make sure the set monthly payment is something within your reach on a regular basis so you are not likely to default on the loan.

The most common use of a personal loan is to consolidate other debts. This is a great way to have one monthly payment and reduce your monthly expenses. However, this scenario only works if you are willing to set a budget and life within the boundaries of it. Too often, a person who gets a personal loan to consolidate their debt racks up huge debt again quickly. Then they not only have that debt to pay again, but now they have a personal loan payment to meet each month as well. It is wise to enroll in a debt management course if you feel you may be at risk to continue the cycle of accumulating more debt. These can be taken for free at many non-profit credit counseling centers around the Nation.

Personal loans are a great way to access the money you need quickly. The application process is simple. You will generally need to verify employment, income, and residence. The lender will pull a credit check. You will likely still qualify for a personal loan if you have bad credit or no established credit. However, be prepared to pay a higher interest rate and have some type of collateral to offer.