If U know us at UMe, then you’re aware that we love to help (it’s our favorite)! We believe that a little encouragement and friendly reminders really do help our members when they’re doing the work to keep within their budget! So today, let’s talk about how to live within your means.
What Do U Mean by “Living Within Your Means?”
Living within your means means managing your individualized finances and personal expenses in a way that aligns with your income and available resources. It involves spending money thoughtfully and wisely, while being mindful of your financial goals, as well as your limits. A good way to keep this in check is to set goals and create a budget to steer you in the right direction when it comes to how you spend money. Just like we all have a limited amount of time and energy, we all also have limits when it comes to money. To summarize, living within your means is about making choices that fit within the boundaries of your financial resources.
For example, let’s say U have a monthly allowance or monthly income from a part-time job. Living within your means would mean carefully considering how you use that money. You should prioritize your needs over your wants and spend money on essential things first, like food, clothing, school expenses, and transportation before spending on non-essential items, like little luxuries (like a streaming service or lash extensions).
It also involves being aware of your financial goals and saving for the future. Instead of spending all your money right away, set aside some amount for savings or emergencies. By doing so, you will be prepared for unexpected expenses and can work towards achieving your long-term goals, such as saving for college or a car.
Living within your means also means avoiding unnecessary debt. We should all aim to spend less than we make. It’s tempting to borrow money or use credit cards for things you want, but can’t afford at the moment. However, this can (and likely will!) lead to financial stress and difficulty in the future. It’s important to borrow responsibly and only when it is necessary, which means making absolutely sure you can comfortably pay back the borrowed money.
Overall, living within your means is about being financially responsible and making choices that reflect your available resources. It allows you to have better control over your money, reduces financial stress, and sets a foundation for a stable, successful, and secure financial future. Regardless of whether you’re just starting out, or you’re at the peak of your career, learning to live within your means is always a good goal to strive for.
You can start by incorporating these money-saving habits into practice in your everyday life to make saving money a part of your routine. If U stick to it, it will become second nature!
- Keep an Eye on Your Spending
Tracking your spending helps you understand how much money you have coming in, how much is going out, how much you have saved, and how much more you can save.
Start by subtracting your known expenses from your income. Then, make sure you plan for other, perhaps unnecessary expenses by reviewing your recent bank account activity.
Get into the habit of monitoring these extra expenses. That is the best way to see where your money is really going. Look for costly daily habits you’ve developed. Are you spending too much on parking or ridesharing? Do you dine out multiple times a week? Are you paying for several streaming services but only using one regularly? To save money, it’s important to create a budget and only spend what you actually have.
While cutting these expenses completely might not be possible right away, try gradually reducing your most expensive habits. This way, you can learn to adjust without feeling deprived.
UMe Pro Tip: Spend only what U have. It’s easy to spend money you don’t have by using a credit card for a big purchase, when you are short on cash. Remember, it’s best to pay that credit card balance in full every month, so you don’t end up paying more in interest!
- Automate Your Bills
TLDR: Setting up automatic payments for your regular bills is a smart habit. Once you set it up, you don’t have to remember to pay that bill each month because it happens automatically.
Automating your savings means setting up a system where a portion of your income goes directly into your savings account, without you having to remember to do it manually. This can be really helpful in working towards your financial goals.
Instead of relying on yourself to remember to save, U can use banking tools, like automatic transfers offered by UMe, to automate this process. It’s super easy to set up automatic transfers from your UMe checking account to your savings account on a regular basis.
By automating your savings, you guarantee that a certain amount of money goes towards your savings goals every month, without having to set reminders or alerts for you to do it manually. This way, you can gradually build up your savings and make progress towards things like buying a car, saving for college, or planning for the future. Now that’s a smart financial move!
- Think Positively About Money
Money can sometimes bring stress and negative feelings, but it’s important to change that perspective. Remind yourself that money is what allows you to have a home, food, and fun! It provides security and stability in your life. Money is your ally, not your enemy, and it can either help you achieve your goals or limit your opportunities. Adopting a positive money mindset can help you find more chances to save money every day.
To train yourself to think positively about money, ask yourself this question every day: How did money benefit me today? This helps shift your focus to the positive aspects of money and how it can enhance your life.
- Put Barriers on Your Spending
Do you find yourself sometimes making impulsive purchases without thinking it through first? Even if you plan to stick to your budget, unplanned shopping sprees or spontaneous outings with friends can quickly throw you off track!
With online shopping available on your phone, it’s easy to spend money without realizing how it can impact your budget. With just a tap or swipe, you can blow past your monthly budget in minutes, without even taking out your wallet.
To control impulsive spending, consider creating some barriers that make you think twice before making a purchase. Here are some examples:
- Remove any saved payment information from your computer and phone (yep, including that Apple Wallet) so you have to physically get your wallet out to make online purchases.
- If you find something you like in a store, wait until you’re home to buy it, especially if it’s also available online. Who knows, U might find a coupon that will give you a better deal, or you can look at shopping portals that give you points to make the purchase! (We love a win-win!)
- Struggle to stick to your grocery list? Use free in-store pickup options offered by many grocery stores. You can select only what you need online and in turn, avoid those extra purchases.
- Going to a place where you tend to overspend? Take only cash with you, and leave your cards at home. This way, you’re limited to your budget.
By creating these systems, you’ll be able to control unintentional spending and carefully stay within your means.
- Prioritize and Focus on Your Savings Goals
By keeping your savings goals in mind and prioritizing them, you’ll find it easier to stay motivated and committed to saving money.
Saving money can feel challenging when you only think about the things you can’t have. But it becomes much easier when you shift your focus to what you’re actually working towards (that savings account balance!) and prioritize those goals based on your true desires.
A great way to do this is by setting specific goals. For example, you can save up for a holiday, or work towards paying off your car loan. Setting specific goals makes them more tangible and feel more real, which can increase your motivation to stick with them.
- Review and Adjust Your Financial Goals
It’s crucial to regularly check and update your financial goals as your situation changes. This way, you can make the most out of your money and ensure you’re on the right track.
Well, UMe-verse, we hope this blog post was a helpful reminder and a motivating tool to keep U and your budget on track! To summarize, not everyone has the same financial circumstances, but the first important step towards financial stability is spending less than what you earn. Remember to adjust your financial goals as you grow and experience changes in your life. We’re on your team and here for U if you’ve got any questions!
Disclaimer: U matter to Me (all of us) at UMe — and that’s why we do our best to deliver helpful information on our blog. Please note the following: (1) UMe Credit Union works hard to make certain that the information we post here is as accurate as humanly possible. But as you know, information can change and evolve quickly. While we try to update the blog on a regular basis, the content of some older posts may not be correct or up-to-date. (2) Some destinations on the World Wide Web that we link you to will exist on external websites. UMe Credit Union does not officially endorse any connected sites, nor do/did we compensate or get compensated by any entities to be featured in our posts (unless otherwise noted). (3) Everyone’s situation is unique and we advise you to consult with our personal bankers or your finance, tax, or legal professional for advice individualized to you!