Managing Money

A Taste of Managing Money

Living Below Your Means, Part Two

Find prosperity in ordinary envelopes. That's right, if you've gathered the data outlined in part one of this article, you're ready to move your family to a mostly-cash economy. This will almost certainly, if you do nothing else, limit your spending.

Since you've written down everything you spent, you have a good idea of what your expenses are, both fixed and variable. Some costs you cannot lower. Rent, mortgage, car payments, insurance, all these were determined before now. Utilities vary only slightly. Presumably you're doing everything you can to lower them, like keeping thermostats turned low and not running every light in the house.

Beyond fixed costs, however, lies a great area of flux. You know what you have been spending in each category, but now you get to choose. How much do you want to spend? Generally, it's wise to not stray too far from your past patterns. Unless you're facing eviction and dunning notices, you probably don't have to slash costs drastically at first.

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