Yahoo Finance 11 ‘Poverty Finance’ Tips To Help You Live Beneath Your Means
When you’re really struggling with money, advice like “stop buying lattes” just doesn’t cut it. For people in true poverty, those small tips don’t make a significant difference because they’re dealing with much bigger financial problems.
See: 7 Frugal Habits That Aren’t Actually Good for Your Finances
Learn: How To Get Cash Back on Your Everyday Purchases
Here are tips from people who’ve experienced poverty on how to actually live beneath your means. If you’re struggling, this is how you get by — and even if you’re doing OK financially, employing these methods can help you save a boatload of cash.
Budgeting: The Foundation of Financial Control
The cornerstone of managing your finances effectively is creating a budget. Budgeting isn’t just about tracking your major expenses; it involves getting granular with your financial data. Knowing exactly how much money is coming in and going out each month is essential for making informed financial decisions. Budgeting helps you identify overspending in specific areas of your life, allowing you to adjust your habits accordingly.
Grant Cardone: ‘Nobody Becomes Wealthy Because of a Salary’ — Here’s What You Need To Focus On Instead
Cut Back Wisely by Prioritizing Your Needs vs. Wants
After establishing your budget, the next step is to identify areas where you can cut back on spending. Assess your spending habits and differentiate between your needs and your wants. This is a crucial aspect of living below your means. Housing costs, utilities and groceries are essential needs that you must prioritize.
However, when it comes to wants, like new outfits for special occasions, consider allocating funds to a “sinking fund” for these non-essential expenses. This approach ensures you can enjoy life’s pleasures without falling into unnecessary debt.
During challenging financial times, adopting a “do without” mentality can be transformative. It forces you to differentiate between essential expenses and discretionary spending. While it’s certainly not feasible to forgo certain expenses (such as food and shelter), this mindset helps you prioritize your basic needs over wants.
Identify Spending Triggers
Recognize your spending triggers. Emotional factors like happiness, sadness, boredom, loneliness or excitement can influence impulsive spending. By identifying these triggers, you can take proactive steps to manage them, such as finding alternative activities that don’t involve spending money. Tracking your expenses helps pinpoint these patterns and encourages more mindful spending.
Avoid Debt Whenever Possible
Debt is a huge financial trap, so it’s essential to avoid it whenever you can. Prioritize mindful spending and refrain from buying items you can’t afford. If you do use credit cards, make sure to pay off the balances in full each month to avoid accruing high-interest charges. Responsible credit card use also can boost your credit score, which will be an advantage to you in the future.
Join Your Local ‘Buy Nothing’ Group
Facebook’s Buy Nothing groups offer an opportunity to share and receive items within your community. These groups can be invaluable for acquiring things you need, and sometimes people are willing to deliver items to your doorstep. It’s also a way to build mutual support relationships with your neighbors. You may find a variety of items, from household essentials to food, available within these groups.
Explore Community Support Options
Research local food banks or churches that conduct food drives in your area. These are essential community resources that collect and distribute donated food items to those in need, providing a lifeline to you if you’re facing food insecurity.
Food banks often collaborate with local businesses, grocery stores and individuals to gather non-perishable food items and fresh produce. Their mission goes beyond addressing hunger; they also work to reduce food waste and promote equitable access to nutritious meals.
Food banks play a vital role in supporting vulnerable populations and fostering a sense of community, ensuring that no one goes to bed hungry.
Bake Your Own Bread
Making your own bread can be a satisfying and cost-effective endeavor. A bag of flour can yield dozens of loaves for a fraction of the cost of store-bought bread. If you learn to make sourdough, you won’t even need to buy yeast. Beyond the savings, the aroma of freshly baked bread can be an indulgent-feeling treat all on its own.
Learn To Say No and Suggest Alternatives
When friends propose costly outings, don’t hesitate to suggest alternatives or politely decline. Suggest meeting up after their activities or joining them for part of the experience, such as sharing an appetizer at a restaurant. Be honest about your financial situation, and if someone reacts negatively, it’s an opportunity to reevaluate the friendship. True friends will understand and support your choices.
Switch To a Low-Cost Cell Provider
Low-cost cell providers like Mint Mobile and Cricket Wireless offer affordable mobile phone services without compromising on quality. Mint Mobile, for instance, leverages T-Mobile’s network infrastructure to provide reliable coverage at a fraction of the cost.
It often provides flexible plans with various data and talk/text options, allowing consumers to choose plans that suit their needs and budget.
Cricket Wireless, on the other hand, uses AT&T’s network to deliver nationwide coverage with affordable prepaid plans. These low-cost providers offer competitive plans that can significantly lower your phone bill while still providing good service.
Seek Free Entertainment
Reevaluate your monthly subscriptions and eliminate unnecessary expenses. Services like Netflix, Hulu and cable TV can add up quickly. Use free alternatives like PlutoTV or YouTube for entertainment. Platforms like Crackle and Tubi also offer a selection of movies and TV shows at no cost.
Additionally, see whether your library provides access to streaming services like Hoopla and Kanopy. You’ll need only your library card to enjoy a variety of media.
With a library card, you also can access Libby, offering a vast collection of e-books and audiobooks for free. Don’t hesitate to engage with your librarians; they can provide information about additional resources, including access to professional development and online courses through sites like Lynda.com.
Treat Yourself Occasionally
While frugality is essential for financial stability, it’s also crucial to treat yourself occasionally. Being on a tight budget can be stressful, and everyone deserves a small indulgence now and then. Consider setting aside a small portion of your budget for occasional treats or experiences that bring you joy.
More From GOBankingRates
The Average American Spends This Much on Rent -- See How You Stack Up
Social Security Schedule: When Benefits Will Arrive in September 2023
Help Protect Yourself Online: 6 Best Strategies to Safeguard Against Online Fraud
This article originally appeared on GOBankingRates.com: 11 ‘Poverty Finance’ Tips To Help You Live Beneath Your Means
