Living with less money will force you to improve your financial management skills.
Having tons of money might be many people’s dream because having an abundance of resources means not having to stress about a thing, although this does not mean having financial freedom. Truth be told if there is something positive in going from not having to concern about prices to become someone who must live a little tight: you learn to manage your finances and control your habits as a consumer.
Of course, this does not refer to not being able to cover basic needs but to have to adjust the way the money is invested to live and feel a little bit safe financially. This adjustment must be followed up through a budget and that is when a person becomes more efficient with personal finance management.
Having a budget to follow and not that much money in the bank account, will make you choose how and where the money is invested. Impulse buying is no longer a thing because you can’t spend beyond what your budget says or your financial capacity.
When you avoid unnecessary spendings and think twice before purchasing something, you will become a more conscious customer. You will take into account things such as cost per use LINK TO ARTICLE or the emotions that are leading up to acquiring something. Living with less money will help you to identify which are your bad consumer habits.
Sustainable Development Goal number 12 highlights the importance of establishing sustainable consumerism to prevent damaging the environment, the economic and social development. The fact that a person does not have the money to splurge, translates into less consumption of things that aren’t needed or are tossed frequently. It will become a more conscious and demanding usage since money will have much more value by not having to spend it just because you have it.
A financial situation that forces you to assess how money is being used will help to establish priorities and learn about the alternatives that already exist to save some costs. Which is more important: to have the latest smartphone or having health insurance? It will be easier to know your priorities that will remain even if the situation improves.
Having the obligation to have better control over your expenses will make you study and learn all the personal finance tactics that you will carry into the future. Although you might have the money, you must learn how to efficiently use it and invest it. This is how you will become the personal finances master.
If you ever have to adjust your lifestyle due to an income shortage, take advantage of it and use this moment to use all the tools to manage personal finances to make sure that you will learn to outsmart your money and make sure it helps to your lifetime well-being.