A Guide for Comfortable Life

What does it mean to live within your means? Does it mean that you have enough money to cover all your expenses?

How to determine whether you are currently living within your means? Among the simple methods that can be used to analyze your current situation is to make a monthly budget, record every expense, and compare it to your income.

When you live within your means, you are living a comfortable life. It does not mean you are rich, but you are living a simple life without excessive debt.

If you find that you have a surplus at the end of the month, you are living within or below your means.

However, if you have to curb your expenses at the end of each month and start borrowing from others or relying on credit cards to continue living, you are living beyond your means. If this is the result of your analysis, you need to immediately change your lifestyle.

Tips for Living Based On or Below Means

1. Monitor Expenses Every Month

Record every purchase in a budget journal so you know where every penny of your money is spent. You'll be surprised how small expenses on things that make you happy, like snacks, candy, and ice cream, can cause you to spend more than you intended to.

Closely monitoring your expenses will make it easier to assess your current financial position. If necessary, review and reorganize your finances by reducing unnecessary expenses. You can use Excel to put in details and accurate calculations.

2. Make a Budget

Create a budget based on income, estimated commitments, and monthly expenses for self-sufficiency. Ensure this budget is adhered to, which will help you stay on the right and healthy financial track.

Make sure the budget will assist you in managing your money wisely. Do not forget to make a provision for investment, which should be at least 5 to 10 percent of your salary.

3. Invest First Before Shopping

In your budget, make sure you also set aside 5 to 10 percent of your net salary for investments.

By setting aside money for investment through automatic investment facilities such as Auto Labur @myASNB or salary deduction, you can automatically discipline yourself to live within your means because you have less cash to spend.

Set a goal to build an emergency fund representing six months of current salary so that you have financial resources in case of the unexpected.

After that, focus on building a retirement fund or a fund to materialize your dreams, such as buying a house or going on vacations.

4. Reduce Debt

If you currently have a huge amount of credit card balance as you only pay the minimum each month, take steps to quickly pay off existing debt and, if possible, cancel your credit card subscription for a while.

Canceling a credit card will help you to control your spending habits as many expenses, which are beyond our means, are paid for using credit cards. Did you know that credit cards charge an interest rate of 18 percent annually?

Don't buy things you don't need to follow the latest trends, attract attention, or compete with others.

5. Pay with Cash or Debit Card

Leave the credit card at home. Only buy affordable items and pay with cash or a debit card. Likewise, if you buy online, make payments directly using FPX. Avoid 'Buy First Pay Later' as it always makes the unaffordable seem affordable.

If you don't have the resources to pay for what you want, put the desire aside and give yourself 3 days to rethink what you want. In this way, you educate yourself not to spend on a whim.

6. Plan your Big Purchase

Saving and investing money for big purchases such as laptops, refrigerators, vacations, or designer goods will help you control the urge to spend on impulse.

If you are still determining whether you can afford that dream vacation, try to set aside money every month, try to invest in ASB, and wait until the amount is enough to pay for that vacation.

Never use a credit card or personal loan to pay for that dream vacation or to buy anything expensive, as you may have to pay twice the actual price.

Why does this happen? This is because debts such as credit cards and personal loans charge high interest, and the amount of debt can increase every time you only pay the minimum payment or fail to pay.

7. Wait for Sales

To get a discount, especially for expensive items that you consider a necessity, wait until there is a sale or discount. In fact, we can already guess when the cheap sale will be held with promotions such as through Lazada or Shopee.

In fact, if we become a member of a large and well-known department store, we will receive notifications if there is a sale.

Use this period to use the money you saved to buy the things that you need. Purchasing a non-perishable item in large quantities is also a good move as they last longer. Just make sure you can settle the bill without going into debt.

8. Don't Hesitate to Ask for A Discount

Be bold and ask for a discount if it's in the right store. For example, if you are a loyal customer, sellers sometimes don't mind giving you a discount if you ask. Sometimes, all you need to do to save is to ask.

9. Provision for Fun Purchases

Remember to allocate some money in your budget for your favorite activities. For example, you can spend once a month at your favorite restaurant based on a predetermined budget.

As such, you must prioritize one expense over another because you can't do everything you want if you can't afford to do so.

Let's say this month you want to eat at a newly opened viral restaurant; you can do so, provided you spend less on your morning coffee or lunch.

10. Make Sure You Have Enough Income

If you've cut expenses to the max and still don't have enough money, it's time to look at your income again.

For now, maybe you should do two jobs, for example, freelance or part-time, to increase your income, live comfortably, and pay off your debt. However, things might improve in the future after you manage to reorganize your finances so that you can live comfortably within your means with only one income.

We have shared 10 guides to help you live within or below your means, so take immediate steps to improve your financial position. There is no better time to change than now.

Highlight :

1. You can live comfortably if you live within your means

2. Avoiding unnecessary debt is one of the important factors to live within your means

3. It's not about your income, but about how you manage your money wisely