Tips to live with less money than you earn
|Published
Living with less money than you earn can seem like an impossible mission. And it is that for a large majority of people, it is almost impossible to imagine a life in which we can meet our basic needs and some extra desires with less money than we have.
That is to say, it is likely that a good part of the people you know, perhaps including you, lives very far from the day , with the need to organize so that the salary they receive month after month lasts at least that period of time and this it's barely enough.
In fact, according to Forbes magazine, 45% of Mexicans have an insufficient salary to overcome poverty, despite having a formal job. This means that in a large percentage of people, even with a permanent job, the money they receive per month is not enough to cover the expenses that arise.
Now, in a scenario like this, is it possible to save money? And even worse, is it possible to save in times of inflation ? Is there any possibility to live with less money than you earn? These tips can help you discover that you can.
Savings according to earnings
It would be unrealistic to ask two different people to save the same amount of money each month, since their salaries and expenses will surely be different. What yes, is that you can try with a percentage equivalent to the salary you receive. For example, when designing a budget based on your own possibilities and needs, you can contemplate that ¾ parts of your earnings are savings or you can try half.
With this basic information, you will be able to calculate how much money you really have if you want to live with less money than you earn, subtracting half or ¾ parts, and draw your budgets with this amount as if it were the total.
Create spending limits
You can start by making a weekly spending limit that will help you define how much budget you have each week, this can make planning easier than if you start directly with a month. You can even divide the expense per day and imagine how much money you actually have every day if you earned half your salary. Thus, the other half will be savings.
Explore your expenses
Many times we look at our account statements and feel a kind of immediate rejection, like wanting to deny reality. Few are the people who, month after month, review what they spent their money on , which many times seems to simply vanish. However, it is important that you do a thorough review of what your main expenses are per month.
For example, if money goes to eat in restaurants, buy clothes, party nights or other forms of entertainment that perhaps you had not realised how expensive they were for you at the end of the month. We recommend that you write down your spending patterns to identify what you could cut back if you want to save, as well as which of your expenses are essential (for example, food, household supplies, etc.).
You may have to cook at home more times a week, but you will notice how much you can save with small changes in habits once you identify what you usually spend more money on.
Set financial goals
Think about what financial goals you have and how much money you would need to meet them. With this information in mind, you can also design a saving and spending plan that allows you to fulfill your dreams. For example, if what you want is to buy a car , then write down how much you must save per month and for how many years to get it. This will also help you live on less money than you earn if you know how much you need to cut from your salary for your goal.
We recognise that the financial landscape of our time is complex enough for most. However, there are ways of organizing, planning and creating habits that will help you design the right budget to live on less money than you earn, even in difficult times. To try it, take these tips into account and organise your daily life.
[via GQ Mexico]