Many Americans, no matter how much money they make, live paycheck to paycheck. They do this because they spend all the money they make rather than spending their money on what they truly need.
Living within your means doesn’t take great sacrifice; it just requires making decisions in the short term that will allow you to accomplish your long-term goals.
For example, take a look at the chart below. You can see how the $3 latte you routinely buy every morning can grow to a large expense over time.
Keeping track of your daily spending decisions, no matter how small, will teach you how even little costs can add up. If you gave up your latte habit, or bought an inexpensive espresso machine for your dorm room, you could save as much as $4,368 in four years. And if you’d been banking that savings, you’d have money to put toward a car when you graduate, rent for your first apartment, or clothes you'll need for your first job.
Look to cut out or trim the nonessentials in your budget so you have more money for life’s necessities, such as rent, student loans, car payments, insurance, and even savings.