One of the most important questions to ask yourself when thinking about money is “Are you living within your income?” It is a simple question. The answer can predict your feelings about money, and the future that you will have.
Generally if you are living within you income, you know where your money is being spent. You may or may not have a strict budget, but once you have spent a certain amount of money each month you stop. You may not have the constant worry of how you will meet your obligations. By choosing to live within your income, you are choosing less stress and worry over money.
Many people who are not living within their incomes are in denial about it. They would say that they are doing fine, or that they have enough money to pay all their bills. So they are living within their income. However, if you are regularly using a credit card, and not paying the balance off in full each month or if you are regular dipping into a savings account you are not living within your income. This lifestyle can be absolutely devastating. It will eventually catch up with you, and you will reach a point where you stretched beyond your limits. The amount you charge each month will accumulate to a point, where it seems insurmountable.
It is important to begin today to live within your means and to begin to save some of your money as well. This is going to be a different process for each person and family. The first step is to sit down and write out a budget, so that you realize where your money is going. Then you will need to cut down on unnecessary spending. This is where you need to determine the difference between a want and a need. These will be different for each individual and family. Food is a need, while eating at five star restaurants is a want. For some families, cable TV is a want, for others they may classify it as need (and if they can afford it or cut in other areas that is fine.)
By choosing to live within your means you are choosing peace of mind. You are choosing to control your future. You are choosing to be responsible and to be comfortable. Although it may seem difficult to live within your means, especially on a small income, it can be done.
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