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How much money does it take for a single adult to survive for one year in the United States? Probably not as much as you would think. When people normally make estimates of the amount of finance required to get by, they usually think about living comfortably—having more than just enough. Additionally, the majority of us have grown so accustomed to having technology and material things that we perceive them as necessities when they are really luxuries. In order to get by in this struggling economy, we must cut back on our reckless purchasing. Living simpler means spending less on a daily basis, and spending less money is the most effective way to be financially secure.
The Money-Saving Mindset
Although having plenty of money is great, feeling too financially secure can be a bad thing. When you spend frivolously, you are in the mindset that there is always money there to spend. What happens when that money runs out? Carefully managing your capital from the beginning can prevent that from ever happening. When you are living on a budget, you are much more likely to keep track of all your expenses. Therefore, you will know where all of your hard-earned money is going and you can adjust your spending accordingly. This will build up your financial management skills, keeping you financially secure for longer, even if you don’t earn that much. When you think that there’s a ton of money in the bank, you will only be concerned with spending it.
Spend Less, Save More
Decreasing your daily spending is the safest way to maintain financial security because you will have more remaining. It does not matter if you are making a salary of millions or just a few thousand; you will always save more money by wasting less of it. Remember that many people are spending much more than what is necessary for basic survival. We go out to eat, we buy drinks at the bar, we spend on the latest designer clothing and electronic gadgets, and we blow more money on other unnecessary things. Learning to live frugally is the best way to save money. This means spending only on the basic necessities: food, rent, utilities, etc. After living this way for a while, reward yourself when you can actually afford to.
How You Can Save Now
There are many easy ways to cut your cost of living. First, purchase and use more energy efficient appliances, tools, lighting, and vehicles. All tech-based products require energy to operate. Be it fuel, batteries, or electricity, all of these resources can be very expensive when the bills add up at the end of the month. Find alternative products that perform at the same level but at a more efficient energy cost. Choices such as a driving a hybrid vehicle, watching movies on an energy-saving projection TV, or installing compact fluorescent lamps throughout the house will save you loads of cash. Another way to reduce costs is to use your main utilities sparingly. Never leave water faucets running, or lights and TVs on when you are away. Instead of blasting the air-conditioning or heat, open up the windows to let in a breeze, or install better insulation so the house doesn’t feel like an icebox.
Consequences of Poor Financial Management
A sure way to save money is to avoid risky behaviors like gambling. When you spend without hesitation, you are gambling your future away. With high debt and low credit scores, you can kiss buying a house goodbye. Your children will have to work and study simultaneously to pay off tuition and living expenses because you cleared out their college fund. You also need to forget about retirement since you’ll be working until the day you croak to survive. Save now and have no regrets later.
Sources:
1. Top 10 Ways to Save Money in a Recession
2. 10 Money Mistakes to Avoid
Author Bio: This article was written by Karl Stockton for the team at www.carinsurancecompanycomparisons.com.