Most of us understand that if we want to have the relief of financial independence that we must alter our spending to live within our means. For many this automatically brings to mind negative connotations of never spending any money and not getting to enjoy your life the way you would like to. While for some it can mean cutting back to the basics for a bit, it also means that after a short period of time you’ll actually find the opposite to be true. When you begin to prioritize you’ll have money for the things that truly matter and won’t find it piddling away on items that don’t last and have very little true value.

Tracking Expenses

Learning to track your income and expenses is the very first step to learning to live within your means. Creating a spreadsheet of your income (all the money you have coming in) and your expenses (all the money going back out), will help you to get a firmer grip on your finances. The trick here is to make sure you track everything. There is no shortcut. Anything you spend money on goes onto the list. Lunches, coffee, shopping trips with friends, everything. Once you know where you stand you can start to make a difference.

Spend Less

This may sound like common sense but it can be harder than it sounds. We’re habitual creatures and we have certain things we enjoy doing, some of them daily. They key to spending less isn’t to completely deprive yourself of everything you like, it’s to simply do it less. If you enjoy having lunch with your friends, make it once a week instead of several times a week. If you like stopping for coffee, maybe consider a cheaper option or only go as a Friday treat. Spending less isn’t supposed to feel like a punishment. If it helps, think of all the great things that money will be going towards instead.

Eliminate Debt

It’s an unfortunate fact that most households have some kind of debt. School loans, car payments, credit cards. You’re not alone. This can be one of the toughest cash expenditures to wrangle. To start living within your means it is necessary to pay this debt down and eliminate it. During this stage of adjustment it may be possible to do without those lunches and coffee stops that were mentioned above but only until the debt is gone. Debt puts a major stress on households and the sooner you can make extra payments and eliminate the debt the sooner you’ll find yourself living within your means. Eliminating debt will free up money for other more important needs.

If you own your home and struggle still with debt, we can help! We are experts in debt consolidation. If you are interested in a review to see if we can assist you – please contact us at (604) 510-1367 or email us at info@bluepearlmortgage.ca