How to Live With Less

As we get nearer to a total credit card economy, getting ahead has become more important than staying out of debt. As people become overwhelmed by working ever harder to pay for more stuff, frugal living is a hot topic. Proponents of voluntary simplicity or living below your means (LBYM) make conscious spending decisions to live a full and rich life.

Instructions

Difficulty: Moderately Easy

1. Set Up a Budget and audit your own spending habits. Compare your expenses (including debt) with your income. If you're consistently spending more than you earn, it'll be no surprise that you're carrying a larger and larger debt load.
2. Make a list of short-, medium- and long-term financial goals. List in detail what you'll have to give up in order to meet each. Give yourself a reasonable period of time to practice your new spending habits in order to see progress.
3. Go through your belongings and cull as much as you can.
4. Favor quality over quantity, and buy the best you can afford. You'll save money in the long run since high-quality items last longer and require less maintenance. This applies to adult clothing, furniture, electronics and cars. On the other hand, buy used quality kids' clothing and toys every chance you get.
5. Use cash as much as possible, and debit cards for household bills and purchases so the money is immediately deducted from a checking account at no interest.
6. Put a small percentage of each paycheck into a savings account.
7. Refinance your mortgage at lower interest rates after paying off high-interest loans first.
8. Consolidate credit card debt in a low-equity line of credit or low-interest credit card.
9. Cancel needless subscriptions. Get rid of magazines you don't read, cut off your cable and pick up a book from the library instead.

Tips & Warnings

• Charges made using your debit card are automatically deducted from your checking account--and therefore are interest-free.
• Barter everything--babysitting to sewing to carpentry and plumbing--with family and friends. Type "barter groups" into a search engine for a wide range of bartering sites, groups and links.
• Buy pre-owned quality items.
• Cruise secondhand and thrift stores for quality and designer clothes at a fraction of their original price.