Cost Of Living John on 30 May 2008 07:55 am
Living Within Your Means
If you live within your means (your monthly outgoings are less than your income) you can use the excess cash flow to increase your savings, make investments or start a business. All of which will move you further towards the goal of being financially free.
On the other hand if you live beyond your means (your income is less than you monthly outgoings) you’re either spending your savings or worse still increasing your debts. Both of which will have a detrimental effect on your financial health.
It should therefore be obvious that your goal is to ensure that your income exceeds your cost of living. There’s two ways to achieve this:
- Earn more money - get a better paid job, get a second job, start a part time business or grow your full time business.
- Become more frugal - take a long hard look at what you spend your money on each month and try to cut down on what you spend.
Until you can manage to live within your means, you’re not going to be able to achieve financial freedom and believe me anyone can manage to live within their means.
