How to Pay For Your Lifestyle without Credit Cards

Can you afford your lifestyle?

How much income does it really take to live the way you want?

And what can you do about paying for it?

First of all, what is a "lifestyle"? Well, it's the quality of your living and working environment: the house you live in, the clothes you wear, the food you eat, the car you drive, entertainment choices, etc. In other words, it's everything that you spend your money on. And this chosen quality of living has a cost, and one that's probably more than you think.

Many Americans have grown up with the idea that they deserve a certain lifestyle, given a certain status from education or familial connections. And many of us live that lifestyle – whatever it takes. Unfortunately, for all too many, our tastes cost more than the income we generate.

So where does the rest of the money come from? Debt. In fact, for years, a huge percentage of the population has been paying for their lifestyle with credit cards and a variety of loans. And we've just seen the kind of trouble that this particular strategy can cause. So what to do?

One thing that you should do, preferably right away, is to take a hard look at what your lifestyle is really costing you and how much money you would need to make to actually afford it.

Almost everyone has heard the general rule that if you spend less than you make, you'll be okay. Well, that's not quite the case... If, for example, you make $100,000 and spend $90,000, you ought to be fine, according to that rule. But, if you want to have ANY cushion at all from the inevitable but somehow unpredicted "emergency" or (don't laugh) put away money for retirement, you need to make WAY MORE money than you think you need.

How much? Start with doubling your current income. That is the first target. Then you will have money to not only pay for your current expenses, but you will also then be able to create new necessary expenses like putting a reasonable amount – at least 20% – of your gross income into savings for that emergency that is right around the corner or that retirement that will never come unless you plan now.

Even when you double your income, there are really two parts to the equation:

1. How much income you bring in;

2. How you spend what you have made.

The first part of the equation is the fact that you just have to make more money. Let's face it, things cost money. How can you possibly spend money if you haven't made it in the first place?

Now, we're going to look at the other half of the equation: what you're getting for the money you have earned. I promise you that one thing is guaranteed to happen in your life – your desires will outpace your means. It happens to just about everyone, no matter how much they make.

Given this fact, we must look at getting the very most out of everything on which we spend our money. Since there is only a finite amount of money to spend, it's very important that we make sure we get the most out of the money we're spending. In other words, we should be getting our money's worth no matter what we buy, whether it's products or services.

For example, do you have any clothes in your closet that you have never worn? Or worn once or twice? Look around the house. Are there things in the closet or garage that aren't being used? How much did they cost? Did you get the greatest amount of use out of each object? So when you get excited about purchasing something new, be honest about how much you'll really use it.

The same goes for services. Are you using all of the subscriptions you're paying for every month like cable, magazine, gym membership, etc.? Do you re-shop your insurance every couple years to make sure that you're not overpaying? You would be amazed at the amount of money you can save by reassessing your annual living costs.

Let's take a look at debt as well. Debt is basically paying now for expenses you have incurred in the past. And this comes at a cost-interest-which creates a reduction in your lifestyle because you'll end up paying more for things than they are worth. So any action you can take to lessen your interest costs will definitely have a positive effect on what you'll have available to pay for your lifestyle.

In the final analysis, adopting and paying for a lifestyle comes down to two functions: making money and getting the most out of the money you spend and save. Improving both of these functions will lead you to a more affluent lifestyle and to financial security.