Living without debt and without loan – seriously!
Any financial advisor who has his head in place will declare that he must live up to his standards to be without debt. This seems almost impossible for people living with a low monthly income and has a list of recurring expenses.
However, we want to answer in this article that while having many expenses, it is possible not to borrow money, no matter how much you spend every month within acceptable standards.
Can you save a few thousand reais every month to invest or make a reserve fund for any emergencies or be wondering how to get to the end of the month of the salary money?
From here we will reveal some tips that will help you to live with little money and still save a good buck month to month to a large amount.
1. Create a plan or budget and follow it
One reason it seems impossible to save or survive on a low income is to spend the money on the salary without a spending control plan. Every item purchased in the market or store seems to be a basic necessity when you do not have a plan. Create a budget and separate a specific amount of money for each item.
Start with the basic items like:
- Utility accounts
Separate a value for each item, if prices or rates change within the month, adjust your budget every month according to the updated rates. Discipline yourself in spending your income based on the budget, especially if your income stays the same for long without increase.
2. Assess housing costs
Many families spend a high percentage of their income on housing costs. Be realistic about your financial situation, if need be, look for a home that you can afford quietly. Do not be embarrassed to move to a cheaper neighborhood or a smaller home if you are having to borrow money every month to keep up with your other expenses.
Of course, moving to a cheaper home may not be an option if you are in a real estate mortgage or a mortgage. However, you can refinance based on your current income. Refinancing can help you save some money if you do it right.
Attention! Your living expenses should not exceed 25% of your net income.
3. Avoid credit cards
Credit cards can be good friends or excellent foes! Using a card can become addictive if you do not have the financial discipline to use it. You can easily spend more than you earn on your income or earnings. If you are trying to get through the month without debt, avoid credit cards at all costs.
I know you do not want to accumulate debts and mismatch your credit history and report. Discipline yourself in paying for each product in cash. Not only will you limit your spending to your budget, but you will also avoid paying additional interest rates and additional fees charged on the cards if you delay the payment or settle only part of the invoice.
4. Reduce your expenses
Create a control plan for your finances that helps you keep track of all expenses. Evaluate each product or service included in your budget and look for ways to save money. For example:
- You can reduce your food expenses
- You can reduce your transportation costs
- You do not need a cable or landline phone when you’re on a tight budget.
- You can not spend half of your income on clothes, electronics, travel and parties.
Tip : Make a budget for your social life and entertainment and try to stick to it.
5. Buy with discount coupons
Use discount coupons to buy groceries, medicines, household items, etc. You can save hundreds of dollars every month if you know where to find coupons. Some stores double their coupons when you make frequent purchases, while others give points that you can redeem by product.
Consider buying products for sale, especially on holidays. Many stores offer huge discounts on various items in a festive season for example. If you do not have the full amount, save the money for several months and then buy the product with money.
6. Buy Second Hand Items
You can save thousands of dollars every year by buying used items. Look for second hand products that works just as well as a new one, search OLX or the Free Market . Sometimes people sell items before using them just because they did not like them.
Instead of buying a new car, look for a semi-new or used car of the same make and model. You can also buy used furniture and electronics to improve your home, instead of spending all your money on new items.
If you want to refresh them later, if you need to, as your income increases.
7. Save money for emergency
Many people use their credit cards and the bank’s special check limit as a sort of emergency reserve – if there is an unexpected expense, the card or limit will make the ransom.
Instead, use the money you are not paying debt to build a cash reserve for emergency, this is healthier. With this simple action you will “keep out of debt” when something unexpected happens.
Living without loan and credit can be risky, but having an emergency fund that can save you is better. Start with 10% of income or salary, then increase to 3-6 months or more of expenses.
8. Earn interest instead of pay it
The problem with debt or credit is that you waste lots of money paying interest. He erodes his finances. Instead, make your money work for you by investing it.
With the magic of compound interest, your investments will grow over time, which means that the money you would be paying in exchange for interest is now earning interest and multiplying. That’s good math.
9. Find an alternative source of income
As you try to keep your expenses as low as possible, think of alternative ways to make more money each month:
- Consider a secondary business in your area of expertise or any other area
- You can do part-time work during off hours and make more money
- Explore various ways to make money online, such as essay writing, tutoring, freelance and blogging
Do not forget that it may be that you have to reduce your social activities to manage two jobs, but you will have more money to spend. However, while looking for a part-time job, make sure that the new venture does not affect your performance in your current job.
10. Be careful and disciplined.
Controlling your spending and saving money requires more than a desire or will – it requires action!
You must commit and be determined to make your personal finances work. Be dedicated because you may have to review all these strategies above for several months before you realize actual results.
Do not give up on the plan and never go back to your old habits of consumption just because you missed the mark in the first few months. Give yourself enough time to learn new consumer habits.
Remember that learning takes time, but ultimately financial discipline will be part of your everyday life. You can live a ” debt-free life tomorrow” and, much better than today’s salary, implant the tips described above.
Have discipline, patience and dedication, these three factors are necessary for you to make significant changes in your finances. Understand that the step you take in the right direction will get you closer to reaching your financial goals.