Unfortunately, most of us were not born to royal families or with a big glossy silver spoon in our mouths, we, therefore, have to toil very hard to afford a decent living. This is mostly the narrative for people across the board especially those who are on an entry level salary. Money matters have continuously proven to be a challenge for most people since they have no training or the required discipline to handle money. Living comfortably on a tight budget is very possible, it depends on the willingness of a person to stick to the main priorities and be frugal in spending.
The following are a few tips on how to live comfortably on a tight budget.
1. Track Your Expenditure
You have to account for every coin that is leaving your pocket. This can be done by writing down all your daily expenses as they happen by the minute. Many people will be surprised at how much money they spend unknowingly on things such as tips and credit cards fees. This doesn’t mean that you stop giving tips, but perhaps reduce the number of times you take food outside.
A budget helps in prioritizing your needs in the modern day world of consumerism. It also helps estimate the amount of money to be spent for different purposes and eliminates lavish spending. A budget will contribute to improving your discipline in spending your hard earned money. Some funds should be set aside in the budget for flexibility in the case something does not go as planned.
3. Re-evaluate Expenses
From time to time you need to revisit your expenditure and review it to determine if there are some things that can be changed. For example, you might be living in a bigger house than you might need, you can move into a smaller house that will save you money and still live comfortably.
4. Avoid Using Credit Cards
Sure, credit cards are very convenient as opposed to carrying a bundle of notes but what is the price for this convenience? The thing with credit cards is you don’t see the cash you spend with your sight, this has a psychological effect and causes unnecessary spending. If you cannot avoid them altogether, it is better to use them sparingly and when it is mandatory. In addition to the hidden fees on these cards, they also encourage frivolous spending on things that are not included in the budget.
5. Financial Education
Having some basic knowledge about money can prove crucial. Knowledge on things like inflation, interest rates, mortgage rates, insurance policies can be a defining factor in living a decent life on a tight budget. Financial education helps in making better decisions and opens your mind to new perspectives about money management.
These are some of the tips on how to live comfortably on a tight budget. In addition to these tips, other traits such as discipline are very crucial. People dedicate a lot of time of time and effort looking for money, and it is, therefore prudent to use that money bearing in mind of future goals and plans.