How to Live Below Your Means

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When I started working behind the chair, if I had any money in my bank account at the end of the month, I would celebrate and find something to splurge on. Living “below your means” only applied to people that made a lot of money and couldn’t possibly spend it all in a month. If someone said they couldn’t afford something, I thought they were out of money. Later I learned when a person says they cannot afford something; it doesn’t mean they don’t have the money. It means they set limits to their expenses. They want to save and stop living paycheck to paycheck—what a concept.

Today, I live below my means and recommend it to anyone, regardless of the income you make. Simply put, to live below your means, you must not spend more money than you earn. So, if you spend less than the money you make each month from all your sources of income, you’re below your means.

Living below your means does not mean you can’t have fun and enjoy life. It means you want to create a more stable financial future and enjoy the occasional treat. You can start this today by saving any extra money, creating a simple budget, and cutting back on unnecessary expenses. It won’t be forever, but until you build up a rainy-day fund, you should limit your spending to the essentials.

Salon professionals, especially the first couple of years in the salon, find it difficult to live below their means or save any money because income often fluctuates week to week. However, there is a way to begin working toward financial stability, even when your earnings are low.

Here are a few tips:
There are five expenses you must always pay first and protect at all costs. And if you are currently living paycheck to paycheck, look for the best deals for these basic expenses. Why these five? Because they will have the most immediate negative impact on your lifestyle if you don’t take care of them.

They are:
● Mortgage/Rent: you need to have a place to live;
● Utilities: you can’t live without water and electricity or a phone;
● Groceries: you have to nourish yourself;
● Transportation: you’ve got to get to work;
● Medical: if you can’t heal yourself, everything falls apart.

Know the above numbers by heart, how much each costs you and what day of the month they are due. Know the total for the month and whatever you earn, do not make any plans for spending on anything until you have the money to cover the above expenses first. Constantly look for ways to lower the costs of these essential expenses. Here are some ideas that work for me (remember this won’t be forever)

Mortgage/Rent: find a more economical apartment or get a roommate. If that doesn’t work, then take the plunge and move back home. The shared living space is challenging but serves as motivation to earn and save as much as you can.

Utilities: Cut the cable and minimize online subscriptions on cable and phone. Keep your access to WIFI because it’s something to entertain you. Read. Watch YouTube videos, chat on free Zoom.

Groceries: this one is easy–don’t eat out, buy groceries and cook at home. It’s much cleaner, healthier, and way cheaper. Also, take your lunch and snacks to work. You will probably lose a few extra pounds. Treat yourself to a latte only once in a while.

Transportation: Keep your old car. The best car to have is one that’s paid for. Service it every 3,000 miles to keep it running well and avoid a big repair. Shop your insurance around constantly. Look for deals.

Medical: Go high premiums and low payments with any policy you can afford. If you are under forty, chances are you only need insurance for something major. Get a policy with a high deductible that lowers monthly premiums and covers most of the hefty expenditures. Shop health insurance around.

Parting shot: Your money talks, and it is saying to you, “Save me today, and I will save you tomorrow.” You have the choice of living a disciplined life or forever living with the regret of not showing up for yourself when you could.

JOIN ME IN VEGAS: Carlos presents a money-management seminars for the salon professional at the International Beauty Show Las Vegas. June 20-21; New York City July 25-26  Learn: To Keep More of the Money You Make, Build a Rainy-Day Fund, and How to Pay Off Debt.


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