As everyone is very much aware, we are in an economic slump. Actually, it’s more of an economic downfall right now and we all need to think about how we can live within our means. What does this mean? Simply put, it means we only buy the things we need and if you can’t pay cash for it, you don’t get it.

How can this be done when so many of us are used to buying things impulsively when we want them or going out to eat a few times a week? Think about this – how many times do you buy a candy bar or a soda from a convenience store? How often do you make impulse purchases at the checkout of a grocery store line? Do you run through a drive-thru for lunch several days a week?

These are all things, at the time, only cost a few dollars but a dollar here, a dollar there adds up quickly to being $20, $30 and even $50 a week on things you don’t need at all. These little purchases can quickly balloon out of control.

We also overspend without thinking when it comes to recreation and entertainment; things like renting a video game or going to the movies a lot. We get in the habit of spending money this way, without thinking and it becomes habit over time. Most of these expenses are things we don’t need and we can save a great deal of money by eliminating them. Let’s look at an example:

Jon makes $1000 a week at his job and his bills total $700 a week. He also has to put gas in his car, buy food for his family and feed his dogs. After the bills and his other expenses, he is left with about $50 a week. If Jon’s only thought was, “Hey, that’s dinner out for the family each week,” he would be considered to be living above his means.

If you are on a tight budget, you’ll have to sacrifice some things you used to spend money on regularly. Instead of paying $50 or more at the movies, rent one and watch it at home. Instead of going out to dinner, cook at home and save a lot of money.

If you can’t pay cash for something you want without sacrificing paying a bill or buying food, then don’t buy it. If there is something you really want, you’ll have to save up the money over time until you are able to make the purchase. If you only make $500 a week and you have bills to pay, you can’t afford a $200 a week car payment; you just might have to buy a cheaper car. It may not be what you want, but it is in your means to pay for it and it works. Living within your means involves sacrificing many wants in order to pay for the needs.

We all have limits to what we can afford to spend and despite that, many of us spend money on things we do not need or really can’t afford. If we identify the areas where we overspend, we can start living within our means and in the process become debt free.

Tags: Food Savings, Reducing Debts, Shopping

This entry was posted on Saturday, August 1st, 2009 at 01:18 and is filed under Food Savings, Home Savings, Save on Shopping. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.