The Importance of Living Below Your Means

We live in a day and age where materialism has dominated society. Countless people exhaust all financial resources and even go into debt from purchasing large homes, fancy cars, and other tangible items. More often than not, people choose this path in an attempt to impress people and show everyone how well off they are.

In actuality, the wealthiest and most well-off people live below their means. There are several upsides to living below one’s means and it’s a strategy that all people should adopt if they are truly serious about attaining financial health.

Debt is Greatly Reduced or Avoided Altogether

As pointed out by Frugality Magazine, people who live below their means are considerably less likely to incur or retain debt. In order to understand why this is true, people must first understand the nature of debt.

Debt occurs when individuals attempt to live above their means, typically by spending more money than they earn. If you earn one million dollars and spend one million dollars, you’re still broke. If you earn one million dollars and spend two million dollars, you are officially one million dollars in debt in addition to applicable interest rates.

Living below one’s means is the best way to avoid debt if it has not already been incurred. After all, a person who spends less than what they earn will not be forced to borrow money in order to cover expenses. Borrowed money that is not paid back on top almost always comes with interest rates. The interest becomes yet another bill to pay on top of other expenses. In some of the worst case scenarios, people wind up spending more money in interest rates than they do in paying the original debt.

An individual who is meticulous and disciplined enough to live below their means can avoid all of the aforementioned financial hardships.

Savings Accounts Become Healthier

Another upside to living below one’s means is the ability to put more funds aside towards savings. Two of the most common financial traps are incurring debt and being hit by unafforadle monetary emergencies, due to one’s failure to save efficiently.

Each and every adult should be putting a percentage of their earnings into a savings account each time they get paid. Not only does this cover any unexpected occurrences such as car accidents, theft, or layoffs, but the psychological benefits of having a financial safety net are beneficial as well.

A Final Word

Ultimately, an individual who lives below their means is setting themselves up for success. They are also taking the necessary precautions to prevent potential bumps in the road. Living below one’s means is not necessarily synonymous with a lack of fulfillment. It simply means earning more than one spends.

Avoiding debt and increasing savings are some of the two most critical element of financial success, yet so many people fail to meet them. However, a new decision can always be made. Those who are already living above their means should strive to either decrease their spending, increase their earnings, or both.

 

Authored by: Gabrielle Seunagal

How Self Employment Can Increase Your Income

In this day and age, “work” has various meanings, depending on who is asked. Some people remain in the workforce as traditional employees, while others are self-employed. There are multiple forms of self-employment, but ultimately, self-employed individuals work for themselves, as opposed to working for another individual or corporation. A person who is self-employed may have various clients or customers, however, the success, or lack thereof, of their business ultimately depends upon them. Self-employment in an inherently risky venture, although few things worth having come with ease.

The Potential for Income Growth is Limitless

In most cases, individuals who work as employees generally receive paychecks. Upon being hired, there is usually an agreed upon salary or amount of hours to be worked. Employees generally stick to these hours and for the most part, the ability to significantly increase income from the aforementioned stream is difficult, if not impossible. Workers can ask for a raise, but there is no guarantee that an employer or boss will agree to it.

The game is completely different for self-employed individuals. Income surges are readily attainable, so long as the person at hand is willing to take the proper steps, market themselves accordingly, or offer new products or services. For instance, a freelance writer who wishes to increase her monthly income can do so by taking on various styles of writing, working with a wider network of clientele, or even increasing her current rates. Conversely, were that same freelancer working as an employee 40 hours per week with a set salary of $15.00/per hour, growing her earnings may be a more difficult feat.

When an individual works for someone else, their income is greatly dependent upon the person who employs them. However, when someone works for themselves, their earnings are determined by their quality of work, ability to market themselves, and make lucrative business decisions. While self-employment is not for everyone, those who are serious about growing their income may find this economic route to be beneficial.

The Options For Tax Deductions Are Plentiful

Most employees’ taxes are automatically deducted from their paychecks prior to reception. While tax season may be easier for traditional workers, easier does not always mean economically fruitful. A full list of self-employed tax deductions can be found and read on Quickbooks; some of the most common deductions include marketing tools, home office expenses, meals with clients, wages paid to employees, etc.

In some cases, self-employed individuals may be able to write off so much that the government actually owes them money. That money can then be saved, invested, or otherwise used to grow one’s business.

A Final Word Regarding Self-Employment

Success in the self-employment field takes work, dedication, and the willingness to work hard, never give up and continue growing one’s business. In current times, every working individual should be striving to increase their economic capital. Living expenses are surging and financial emergencies can occur at any time. Opportunities to grow one’s income and decrease owed taxes are two of the most productive ways self-employment has and continues to transform lives.

Authored by: Gabrielle Seunagal

The Benefits of Multiple Income Streams

Any individual who wishes to achieve financial health must first obtain multiple streams of income. In business and in life, a singular source of revenue is simply not enough. Many people work as employees for various businesses or corporations. They are generally paid a salary which allows them to live (somewhat) comfortably. More often than not, so long as working people are able to pay the bills, they have no other financial concerns. However, what appears to be a safety net can, and sometimes does, break and leave the once safe person plummeting into financial peril.

Multiple Income Streams Counteract Finacial Loss

Turnover is a reality of the professional world. Not every person who is hired to work for a certain company or perform a certain task will retain that position for the rest of their lives. In many cases, they will not. Sometimes, the individual at hand will be terminated or otherwise laid off for whatever reason. Regardless, as pointed out by Business Insider, a person who relies on an exclusive stream of income, only to have it evaporate, will then be faced with wondering how to pay bills, put food on the table, and have a place to call home.

However, an individual with more than one source of revenue will remain considerably better off, even if one stream lessens or disappears altogether. There are several ways to engender multiple sources of capital including, but certainly not limited to, making fruitful, wise investments, freelancing on platforms like Upwork, or even setting up side gigs, such as driving for Lyft or Uber, or renting out space in your home on Airbnb. There are myriad opportunities and options for those who seek them; each and every adult owes it to themselves to take every possible chance to strengthen their financial security and counteract any future losses.

Multiple Income Streams Boost Well Roundness

Well-rounded people tend to fare well, especially in business. More often than not, individuals who are well-rounded must market their skills or otherwise prove themselves in order to profit financially. However, a person with multiple streams of income is more likely to be educated and well-versed in a variety of areas, as opposed to their less diverse counterparts.

Most people work to earn capital and then use said capital to make purchases. While certain purchase, such as groceries, clothing, personal care items, etc, are necessary for basic living, a percentage of one’s revenue should go towards creating new streams of income. Sometimes, this can be as simple as investing in certain stocks, bonds, or mutual funds. In other cases, an individual might take a class so that he or she can learn a new skill and later market that skill to earn a profit.

There are always ways to diversify revenue streams if one is creative enough.

A Final Word

The world is changing each and every day. The most successful people are usually the ones who can easily adapt to change. Financially speaking, one of the best methods of adaption is to always have the safety net of multiple income streams.

Smart Ways to Live Like You’re Rich

We’d all like to learn brilliant ways to live rich and feel richer, right? It feels difficult, and there might be times where it truly is, but you can work through any financial struggle when you think smart. There are numerous ways to live like your rich even when you’re not. Keeping up with the Jones’s doesn’t have to break the bank–there are smart ways to get ahead. For instance, you might not have thought about using your credit card reward points to score those fabulous trips you wouldn’t ordinarily be able to afford–but you can.

You can live a life free from financial stress. You do need to be accepting of your limits though, and be more aware of what the priorities are. For instance, you certainly need to be well rested to be able to work hard for a higher income, so investing in a great mattress should be a priority. This is just one example of where to start in smart spending decisions. Now, when you do earn more money that doesn’t mean you should start spending more either.

The following tips we will share below should give you an idea on how you can live like your rich and be happier, wiser and more comfortable in your every day life.

Living the Rich Life Wisely

You have to invest and save to get rich. So, what the experts say is to determine exactly how much money you need a year to enjoy your life. Once you have that figure all the rest of your earnings should be saved every time you get paid. When you want to take a trip, take advantage of those frequent flyer miles, or cash rewards on your bank or credit card. When you want that big item at the department store, put it on layaway or save for it every week and then go pay cash. The idea is to try and pay outright for everything you acquire then you’ll avoid debt and be able to live with less stress and financial worry!

These tips can help, but everyone is different so take your time, plan a strategy and stick to it! We can all enjoy the better things in life when we think smarter and not act on unwise impulses. It’s time to put a plan into motion to live rich! Follow these additional tips to live the life you deserve today:

  • Never spend more than 25% of your income toward housing costs
  • Stick to a grocery budget and shop for sales
  • Set financial goals and stick to them
  • Wait for an item to go on sale and purchase it off season
  • Listen intently and read financial newsworthy material 
  • Stay on top of your bank finances and know what you have in the bank