Living Richly on a Small Budget: Know Your Limitations

Last week we covered the definition of rich. I hope that this helped out at least one individual realize that they can live richly. I know that writing and researching the topic has really helped my own perspective this last week. I feel very blessed to be living the life that I am right now and know that I truly am living richly.

One crucial element to being able to living richly on a small budget is knowing your limitations.

What do I mean by this?

What can you truly afford? With the money that God has blessed you with, what is the best way to spend that income?

Sometimes this is a harsh realization. However, the last thing you want to be doing is spending more money than what you are putting into the bank. Getting yourself into debt is not a desirable situation.

The easiest way to recognize where you may be overspending is to keep a spending journal.
I actually still do this every month with our credit cards. I love credit cards because we pay them off every month and receive cash back bonus is return. Note the pay off every month part. However, I keep a list of everything I put on the credit card so I track our spending.

I suggest keeping a small notepad or even a piece of paper with you. Write down everything penny you spend. Whether it is $1.25 at the pop machine for a caffeine jolt in the middle of the afternoon, buying that adorable dress on the sale rack or your weekly grocery haul…keep track of it. Once you begin to see the numbers of what you are actually spending each month it can be a little overwhelming or maybe you’ll be pleasantly surprised with how well you did. Either way this establishes on paper what your spending habits are.

At the end of the month add it all up. Don’t forget your living expenses such as rent, utilities, insurances, car payments, fuel and your tithe.

Are you spending more than you make? Are you saving enough? Is there room for you to cutback in some areas of your spending?

Know your limitations. Once you understand that you can establish your monthly budget. You budget is another very important element in living richly. 

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