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What it Means to Live Below Your Means!

I can almost guarantee most of you who are reading this have heard the phrase “live below your means”.

A simple concept that is not so simple after all. Not so simple because we live in a country where it’s normal to work, get a paycheck, pay bills, spend, and then wait eagerly for the next payday. A continuous rat race that doesn’t look like it will end any time soon.

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Who wants to live a life if you’re always living paycheck to paycheck?

Not me! Debt hurts financially as well as emotionally – it causes unnecessary stress and reckless living!

Your ultimate goal should be about financial freedom….free to do whatever you want, whenever you want without the burden of financial debt. And let me tell you, living at or above your means never works out!

What does Living Below your Means Look Like?

It’s simply spending less than you make. Sounds pretty easy, right? Well…may not so much, and it can be even harder if you’re providing for a family.

People are in the habit of making a living only to hand their earnings over to someone else. By the time they are done paying everyone else and personal spending, by the end of the month there is never any money left. Savings is nonexistent.

The first step of living below your means is to learn how to pay yourself first. This means taking out a portion of your income before anyone else calls dibbs on it, and setting it aside for you! After you get your portion, everyone else will get theirs. I like setting up direct drafts from my paycheck where a percentage goes into a separate account (away from my checking) before I even see it.

I’ll be honest, at first you’re going to feel a little pinch as your finances learn to adjust to the new system. I suggest you start off small and work yourself up. Begin putting aside 1% of your income and each month (or every other month); increase that amount by 1%.

It doesn’t stop there! Next you want to see what you’re spending on your monthly expenses. Look at your cars, home mortgage, recreational spending, luxury items (cable!), and see if those expenses are hurting your ability to live below your means. If you can’t afford to save at least 10% of your income, you need to take a hard look at what you are spending. Being successful with money is about what you SPEND, not HOW MUCH you make!

Simple Steps to Take to Live Below your Means

Quick and easy steps you can follow today to get you on the right path. It’s things you probably already know, so I won’t go into detail…be like Nike and JUST DO IT!!!

  1. Stop borrowing money.
  2. Get on a budget. 1st thing on your budget spreadsheet should list YOU as the biller. Pay yourself FIRST!
  3. Find ways to reduce monthly expenses. Every dollar counts!
  4. Stop watching the Joneses and trying to be like them. They’re broke.
  5. Be consistent. Learn the word “no”.

Hope you got something out of this. I could continue with my list of what to do’s…but I’ll go easy on you this time (lol). In all seriousness, these are great steps you should start today if you aren’t already. Like I said above, living below your means is actually simple, not easy. If baby steps are taken, the aches of financial maturity won’t be so bad.

Love to get feedback. Share your 2 cents!!!!

How Tracking Devices Are Helping Car Insurance Holders Reduce Premiums

Lowering premiums is often a top priority for policy holders looking to save money while still having the benefits of insurance. Some car insurance companies are trying to help customers achieve just that with some innovative new technology meant to help people maintain their vehicle according to their policy’s stipulations.

But there’s a catch: this technology promoted by some car insurance companies is tantamount to a spy movie-like monitoring device installed in a customer’s vehicle. The question is whether or not customers will allow themselves to be tracked in exchange for lower premiums.

An article published on USA Today detailed this new movement by car insurance companies to incorporate tracking software into a lower-premium plan. According to the article, it seems like the primary usage for such technology is parents who want to keep tabs on unruly teenagers who are just starting to drive on their own. Everyone knows that insurance companies have higher rates for teens who drive simply because they tend to be riskier behind the wheel than veteran drivers. It appears that this tracking technology is one way that car insurance companies are trying to cut families a break.

One of the pioneering companies for this technology is Traveler’s. They offer a feature called IntelliDrive that essentially works as a tracking system for a customer’s vehicle. The device collects data about where the vehicle has been driven, at what times it’s been driven, and even the speed at which it’s been driven. The data is readily viewable for drivers, and it also helps car insurance companies make sure that people meet the mileage standards of their policies.

The feature also doubles as a helpful device for parents who want to keep tabs on their kids. Parents can view the GPS data from these devices to make sure that teens behind the wheel were responsible while driving. Parents can view their kids’ speeding patterns, itinerary, and other helpful data through IntelliDrive. And what’s more, they can significantly reduce their kids’ driving insurance premiums for doing so.

Of course not everyone will be willing to submit so much information to insurance companies (or to monitor their kids so closely) in exchange for lower rates. Some may say that this tracking technology is a step too far in monitoring a person’s driving history. The idea of recording every single mile driven might turn away teens who would otherwise want to drive, or it might turn off adults who want lower premiums but not at the loss of their privacy.

In any case, Traveler’s program is still its infancy—and it’s only available in a handful of states. It remains to be seen if customers will increasingly support tracking technology in their cars in exchange for better prices on their policies.

Pro Tip: You can sometimes save money by bundling homeowners insurance and car insurance.

What’s your take on this tracking technology? Would you let insurance companies know your driving habits if it cost less money to have a policy? I’d love to hear from readers about this!

Message from Victoria: I’m all about saving money but I don’t know about having my insurance company track my driving habits. Thanks Susan for the great information…definitely something to think about and consider!

Unemployment; What to do When You Don’t Know What to Do!

Last night I watched a documentary about 4 or 5 families who were unemployed and have been for an extended period of time. Like so many Americans, some families struggle to keep their homes, better yet, keep food on the table! I’ve heard many stories about the challenges people face with unemployment – in many cases it falls on families that did everything right, and yet were laid off due to no cause of their own.

They had good jobs, money in the bank, highly educated, and a house with the white picket fence. Then one day they are summoned to the HR office and their lives changed in an instant.

I was amazed to see how someone who had the credentials and experience behind them could be out of work for almost 2 years! One particular individual was even more anxious because her unemployment benefit was about to run out….it had hit the 99 week point! As I was watching, I began to think if this was truly a hopeless situation, or if there was anything that could be done to improve the situation. There are so many people in this predicament (look at the unemployment rate!). I can’t imagine there is ever anything someone could do that could prevent them from being laid off, but I jotted down 10 quick steps that may help the unfortunate unemployment situation…

  1. Keep up with your network– I’ve begun to believe that nowadays it’s about who you know, not what you know. Keep up with your network! Sites like LinkedIn are great ways to stay in tuned with your professional contact list.
  2. Don’t burn your bridges– my mother always told me to never burn bridges because not only is it just plain tacky, but you never know if or how that person or company could help you in the future. Treat people the way you want to be treated because what goes around always comes around!
  3. Have an emergency fund- of course this goes without saying. The rule of thumb is to have at least 3 months of expenses saved towards your emergency fund, but you may want to increase it to 6-8 months. Depending on your circumstance and how stable you feel your job is, you may want to be more conservative and attempt to save a years’ worth. After watching the documentary last night, one year saved really would be nice!
  4. Be open to relocate to another city with greater opportunity What I found is sometimes people are emotionally attached to one city for whatever reason, and close out other markets that may offer better opportunity. If you’re in a field where you are not getting enough opportunity, look at neighboring cities, or do research to see what city has the greatest opportunity for your field.
  5. Live well below your means and eliminate DEBT! This is pretty straight forward so I’ll move on to Step 6.
  6. Have a sense of gratitude for what you have….ALWAYS! I know it’s easy to complain about things when they are not quite going your way (I’m guilty of it too!), but I think we should always be grateful for what we DO HAVE. Think about it, does complaining ever change your current circumstance?? You never what you have until it’s gone, that’s with anything in life, not just finances. So let’s show appreciation.
  7. Have an entrepreneur mindset. I can’t tell you how many times I’ve heard stories about people who were laid off and then started their business based on their passion in life. I’ve seen where layoffs were actually a blessing in disguise because it allowed the employee to become a business owner. Think about your passions in life and brainstorm on ways to monetize on it! Personally, I am infatuated by my fellow personal finance bloggers who write great articles that help others and can make money off of it. These are some of my personally faves!
  8. Hold on to the ones you love- your support system. A support system is ALWAYS a good thing, especially in troubling times. It’s the support you receive from loved ones that help you get through the storms. There was one family on the documentary last night that had to hold on tight to each other because life was throwing them hard blows! They weren’t just dealing with their unemployment issues, they had other problems as well. Without each other, I don’t think they would have made it through!
  9. Remember, what doesn’t kill you only makes you stronger! I’m sure you’ve heard this phrase before and have probably used it to get you through a tumultuous time in your life. It’s been the challenges in life that have really helped me develop as an individual. I strongly believe character is built when you go through hard times.
  10. Confidence will get you far! In the documentary they had a segment that showed a sign saying “unemployed need not apply!” I thought that was crazy and then I thought it really is easier to find a job when you already have a job. Why is that?? A friend and I discussed this yesterday, and we concluded when you have a job and are looking for a new job, you don’t have the unconscious “desperation” as an unemployed candidate may have. There is a certain level of confidence that is conscious or unconscious that is translated to the employer.

This is actually GOOD NEWS for the unemployed if you know to remain confident in your skills and ability when you walk in a job interview. YOU GOT THIS!!

Hey, I love to talk but I love to hear your opinions more, so your 2¢ matter! Share your thoughts!!!