Living Below Your Means Vs Raising Your Means
It is commonly accepted in the financial world that you should live below your means. This basically means that you should spend less money then you make. Even though that is generally accepted there are two different ways to solve this problem.
The first idea is to simply lower your expenses and start saving your money. If you bring in $4,000 a month and spend $4,500 then you are going to run into all sorts of problems. On the other hand, if you bring in $4,000 a month and only live off of $3,000 a month you are saving $1,000 a month.
The easiest way of cutting your expenses is to simply make a list of the expenses that you have each month. Then try to cut corners and see how you can save more money. Do you really need to go to that coffee shop every day?
However saving money isn’t the only way to live below your means. Another way to do this is to simply make more money. Looking for alternative income streams which can produce income on the side can be a great way to build financial security.
If you are spending as much or more then you are making in a month you can fix that problem by simply making more money.
The only thing that you need to remember is not to raise your expenses to meet your income after you have reached your income goals. It is not “living below your means” if you raise your expenses every time you raise your income.
So, which road should you travel? Should you attempt to save more or should you attempt to save more? Well in all honesty doing both is the best solution. If you can control your spending it will greatly affect your finances in a positive manner. Also if you can raise your means by creating some extra income from other sources it can also be a great idea.
For more on saving extra money or for information on creating alternative income streams visit Shaun’s site which talks about generating extra income
Tags: expenses, finance, income, Personal Finance, savings, Wealth Building
