Living below your means (Part 2)

Hello Swarm Single Moms

Living below your means...

Living below your means is another way to say spend less than you make and ... even if you can afford the more expensive item, (but the less expensive item is just as good and will do the job), buy the less expensive.  This goes for houses, cars, food, etc...

To live by the motto, 'live below your means' is to allow your decision making skills to rely on reason and not emotion.  Reason will tell you to purchase what meets your needs while emotion tells you to go for your wants.  Living below your means helps you differentiate between the two.

 For instance, when you need to make a big ticket purchase, (i.e. an automobile) you should research makes and models and come to understand what your auto needs are (big family, efficient gas consumption, good mileage, good resale value, etc...)  Once you have determined your auto needs, you should monitor auto sales to understand prices of autos that have the features you require. Your next step would be then, to check the bluebook prices (a book which provides information for autos, including prices, makes, models, features, etc. various autos), The bluebook information is key for learning to recognize what you should be paying given the type of auto your needs.  If you are living below your means you would then purchase an auto that meets your needs, but one that is not extravagant.  This would the auto that you can easily afford to buy, run and insure.

Living below your means will help you save money because you are not spending everything you can.

For those of you who do not normally save enough money to purchase an auto without a loan, I have two tips that may help you after your car has been paid off:

Tip #1:  Continue to bank the same amount of the payment that you had been making, only now put it into your savings account.  This will help you when you need to have work done on your car and/or when you get ready to purchase your next car.

Tip #2:  I have read many books on how to save money and each and every one mentions that when you do need to get a new car, do not buy a new car, instead purchase a 'pre-owned' car.  This goes against everything I learned growing up in the motor city, and I am reluctant to endorse this mind set, but it will be the way I approach replacing my current car when the time comes.  If I can get a great used car, I will most likely do so, but I will approach dealers with my plan and see what kind of a deal they can get me on a new car.  (But my plan is to buy used.)