Stick to One Budget That Doesn’t Change Based on Your Income Level
Most of us make a budget by looking at how much we make and distributing it among the things we need or want. However, when your budget includes all of your income, you are likely to spend all of it. Instead, pick one budget level and stick to it, no matter what windfall or pay raise you get.
As explained in the personal finance blog “Money Can Buy Me Happiness,” you don’t have to give every dollar you earn. Setting a budget based on the lifestyle you want to live and then sticking to it means that if you get a pay raise, a tax refund comes in, or you have some other windfall income, you won’t be improving your lifestyle. to adjust to it. This is life according to your means, regardless of your means:
I made a budget that takes into account everything we need, no matter how much we make. Of course, I knew about our income limits, but they did not determine my budget. The figure changed slightly to account for the rising costs as I moved from living with my housemates to living in a one-bedroom apartment and then living in my own home with my family.
You see, the problem with budgeting the other way around – calculating what you make and then how to split it to cover what you need / want – means you never have a dollar to spare. I promise you that all gaps will be filled. If you’re a big budget employee, you can plan for savings as part of your budget, but in reality most people don’t pay themselves in the first place. They pay the bills, and what’s left should cover the rest. Small balances may remain for savings, but most likely they will go to unnecessary nonsense.
This (and all budgets) is harder to do if you are making less money. The good news, however, is that as you move up and earn more, you’re accustomed to spending less. If you are forced to live on $ 20,000 a year, then if you get a new job that pays $ 30,000 a year, you will not have to lose it.
The Opposite of Life is beyond Your Means | Money Can Buy Me Happiness Through Rockstar Finance