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Live Within Your Means

Some people say that the key to managing money effectively is to ‘live within your means’. You need to make sure that your monthly costs and expenses always come to less than your net income, which is the amount you earn after any taxes have been deducted. If you always aim to live within your means, then you will be able to stay out of debt and save for the future.

A good way to establish whether or not you are living within your means is to keep a record of where your money goes each day during a typical month.

Here’s how to get started:

  1. Make a note of everything you spend money each day, over the course of a month. Record everything, from your daily commute to the snack for the journey home. Include regular payments like your rent or mortgage, as well as all your household or utility bills. If you track your outgoings carefully, you will feel in control of your situation and will be able to identify where your money goes.
  2. At the end of the month, add up all of your expenses and subtract this total from your net monthly income. If your monthly expenses come to less than your net income, then you are living within your means effectively. 
  3. Take time to reflect. If you aren’t currently living within your means, don’t worry. There are plenty of things you can do to take control of your spending. Start by using the record of your spending to identify which expenses, if any, could be reduced or avoided altogether.

Creating a budget will help you to map out how you will spend the money you earn. 

If you’re new to budgeting, try out tools available to you on the HSBC Financial Wellness Center 



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