Tired from the day, you let your head rest on the pillow.
You’re hoping to fall asleep but your thoughts keep your mind busy. Tonight, as many other nights, your thoughts go to your finances. You’re worried.
But you’re also hopeful because you’ve done what you can. You’ve started to budget to be able to live within your means. You know you can do this and you relax. Since you know these are some of the benefits of living within your means.
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When your mind doesn’t have to go to the place of “Oh shit, how do I get through the month?” it can focus on other things.
You might say that you were never that worried about it and didn’t think about money so much. But if you were losing money, and not able to make ends meet, each month I’d call you a liar. Not to be rude, but even if you weren’t thinking about it in a conscious manner, you were worrying in a subconscious way.
Oh yeah, that’s right. You worry even if you don’t know it. Ever had a weird dream or nightmare about not having dollars? Well, that’s your subconscious mind telling you it’s freaking scared.
There are studies done about how a mindset of scarcity causes your mind to be occupied with that problem. This use bandwidth from other stuff your mind could work on.
Scarcity mindset means that you feel that you’re lacking in some area of your life. What you feel you don’t have enough of, you focus on.
Scarcity could be in areas of money, time, love, or other things.
You can view bandwidth like a highway with tons of lanes. If you’re in a scarcity mindset about money, as in you feel you’re lacking money, a lot of those lanes will be filled with money-worry-cars.
Of course, to be in a scarcity mindset, you need to first realize that money is scarce.
Anyway, if you can worry less about how to have enough money you can free up your lanes for more productive stuff. Like, how to make more money. Or how to get that promotion at work.
Now that you’re not scraping by or have to borrow money to get through the month, you can focus your energy on other stuff. If you have racked up any kind of debt it’s time to think about getting rid of it.
Living within your means done right means that you’re having money to spare each month. Don’t go spend them on useless crap now. Start paying off your credit card debt or whatever other consumer debt you might have accumulated.
Did you buy stuff with a down payment plan, then it’s time to attack that too. You want to work on anything you have that you pay off with an interest.
If you can get rid of the debt, or lower it, you’ll likely lower the interest. This means you can get more money freed up to pay off the debt. And lower the monthly cost. And on it goes, till the debt is gone.
Once the debt is gone you can start saving money.
The first thing is to set up an emergency fund, or rainy day fund, or whatever you want to call it. Save money to cover about 3-6 months of expenses and keep it in liquid assets. Like a checking account.
This sounds like a lot. I know. But get started anyway, even if you can only get to cover one week’s expenses at first, that’s great. It’s a hell of a lot better than nothing.
The plan is to get a fund to cover your butt if something bad happens so that you don’t have to cover an expense with credit cards or other loans.
With the emergency fund in place, you can start working on other things. Like investing.
I will not go into an depth here since investing is a huge topic with everything from index funds, stocks, ETF’s, and other weird stuff like cryptocurrency.
My advice is always to talk with a professional financial advisor about these things. Then you can get informed yourself and make your own mistakes. But run them by an advisor.
I can only suggest staying the heck away from crypto unless you know what you’re doing. That’s based on one of my mistakes. Against my better judgment, I heard that Bitcoin is the coolest thing these days and bought some Bitcoin certificates.
Before they dropped like rocks.
I didn’t invest that much, so it wasn’t a huge loss. But it shows what can happen if you invest based on the wish of a quick win, instead of a sound investment strategy.
That’s the kind of thing an advisor can help you with - a sound investment strategy. And hopefully, they’ll tell you to stay the heck away from crypto.
Never underestimate the value of peace of mind.
I used to worry about money a lot. I didn’t have much when I was growing up. I had even less at times when I was in my mid 20’s.
I know first hand that it’s no joke that it keeps you up at night. If you don’t know if you can pay rent this month, you won’t sleep like a baby. That’s for damn sure. When you begin living within your means you will start to experience a calm.
A calm mind is a more creative mind and a creative mind can spot opportunities better.
This will make the nights much more enjoyable too. A good night's sleep is worth so much.
If you're having a hard time living within your means I would suggest that you begin budgeting.
I have a Free eCourse where I go through the same system for budgeting and managing finances that our family use.
This system helps our family save between 50-70% of our income each month.
Do you have any examples of other benefits that can come from living within your means?
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