Have you counted every coin that comes out and every coin that comes into your life? Doing it can be very interesting, because that way you will know why you are unable to save. Spending less than you earn is very important. But, for this, you must control your income and your expenses.
The vast majority of people do not have control of this type . This causes them not to know why they do not arrive at the end of the month with certain money. Also, they are often surprised that other people with less, do come and still have them.
The reason may lie is that these people know what they spend and are able to stop investing in what does not bring them any benefit. Let’s know the tips on Spending Less Than You Earn.
Do Not Squander The Money
Perhaps, when you start to commit to keeping track of your expenses and your income, be aware that most of your money goes into something that is not essential. For this, we have to differentiate between what are basic needs and what are not .
Those expenses that may be justified will have to do with food, clothing and household expenses. All these expenses are necessary. However, there are others that do not.
For example, if we are smokers, a large part of our money may be spent on tobacco. Also, it is possible that our car, if we have it, supposes a great investment of money.
Being aware of all these expenses can help us eliminate a bad habit of our lives. We can even start using public transport or walking to go to certain places that may be close by.
Get Financial Freedom After Spending Less Than You Earn
Spending less than what you earn will help you to have a cushion of money in the event of an unforeseen event. For example, that you get fired from work, that you have to make a large investment in a new car, that you raise the rent.
Any unforeseen event can cause us to stress if we are not prepared to face it . The moment we spend less than we earn, we can save. The more money we have saved, the more financial freedom we will have.
What is financial freedom? The time we can live from our savings. This is calculated by dividing all the money that we have, and that we can use it to spend , by the average of expenses that we have monthly.
Thus, if we have saved about 10,000 dollars and our monthly expenses are 800, this means that we can live a year without income. The more financial freedom, the much safer we will feel.
Invest With Wisdom
However, although spending less than you earn is very smart, it is not positive that the money we save is stopped . We must know how to get the most out of it. Therefore, you must learn to invest in what will bring you benefits.
For example, if you have already detected that a large part of your income was destined for tobacco, you can eliminate this bad habit and do something better with that money that will now be left over. Instead of wasting it, save it to invest in liabilities.
What are liabilities? They are those goods that can give us some benefit . For example, a house, storage room or office that we have for rent, an amount of money in an investment property that gives us monthly interest.
There are many liabilities around us in which we can invest. These will help us better manage our money and invest it in something that will not provide more money. In this way we will eliminate many worries and we will be able to live enjoying a greater well-being and tranquility.
Spending less than what you earn gives you many benefits. But, for this, we must keep an exhaustive control of all our expenses and income, even if it is only one euro. We can create an excel on the computer with all the information or buy a book .We encourage you to discover what is the best way for you in spending less than you earn.