To get ahead financially you need to learn to live below your means. This rule used to be a strict message of previous generations, but these days with such easy access to credit and high level of consumerism is somewhat forgotten. Well, that is if you buy into living your life on credit.

I am not a financial adviser, but I figured that if I don’t have the cash for it, I don’t buy it. Except of course in the cases of large leveraged assets. As such I do not hold any store cards, nor do I go into short term or pay day loans. Credit cards can be a necessity to arrange some things, like travel, but need to be paid off immediately.

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So what do you need to consider to learn to live below your means?

  1. Know your expenses. – Do not lie to yourself here, it is you who it will backfire on! How much does it cost for you to live? Knowing your expenses helps you to plan on many levels. It helps to plan the next investment or exit plan or even your financial buffer amount! There are some things that are ad hoc, but I am hoping you allowed for that in your budget!
  1. Limit the use of credit. – I would start with cutting up any store cards you have, you don’t need them! Keep one credit card for emergencies, cut the rest. To reduce your debt on credit, you can implement our Drive Debt Down system, download it here!
  1. Cut all services you don’t need. – Pay TV is a great example! But let’s not stop there! When was the last time you checked in on your mobile phone contract, can you get a better deal? Or on your internet, insurance and other services that we tend to set and forget. You can make great savings by re-negotiating these. I just did this exercise recently and found an extra $4,000 doing so!
  1. When was the last time you checked your credit score? Having several credit arrangements, especially if they are over extended can damage your score massively. Not to mention the limitation these put on your ability to invest.
  1. Separate your accounts. Make sure that your savings and investment accounts are separate from the one you are using for fun or even bills. Much easier to manage.
  1. Stop wasting your money on take aways. Yes it is nice to have at times. Make it a treat! Having a coffee each day can add up to $1,500 a year. Buying lunches every day is approx. $7,000 – and I am only thinking of take aways here! These are not only bad for your wallet, but also your waste line! In some areas, that is nearly a house deposit!
  1. Learn to negotiate. You can use negotiating for anything from negotiating your salary increase, your rent, mortgage payments, insurances, phone contracts and the list goes on. Don’t just accept things as they first appear. Ask the question how can they be better?

It’s hard to think positive if you have to constantly worrying about money, which ends up seeing you actually repelling it!

The above mentioned points help you take control back over money. You need to be the master not the slave.

Are you ready to claim your financial freedom, but not sure where to start? Join, Get a (Financial) Grip now.