How to Live Within Your Means


Living within your means is all about budgeting your money and keeping yourself out of debt. If you aren’t sure whether or not you are living within your means you should do a little test. Calculate all of your bills and any other expenses you have paid out within the last month or two. Is that amount greater than the amount of money you are bringing in every month? If so, you are not living within your means. You are probably using some sort of loan like a credit card or home equity line of credit. If this is the case, you need to reevaluate your money situation so that your expenses fit your income.

The first step to living within your means is to figure out what expenses are necessary and which aren’t. Big items on the expenses list include rent, utilities and food, which are definitely considered necessity. One thing to consider about these items though is that you may overuse them to the point where the excess is no longer necessity. Do you find yourself walking into a room to find that every light is on? Do you crank the heat all the way up even when you could make do by putting on a sweater? Do you spend 45 minutes in the shower when five or 10 minutes will do? If this is the case, you should consider cutting down on these expenses as much as possible. Try this for a couple of months and then compare your past utility bills to the ones during the experiment time. You may find the differences astounding.

You should also try to cut down on things you know are not necessity. It is okay to have some things that you don’t need, but you should be sure to draw the line at the point where it stops being a little indulgence and starts become a huge luxury. The amount of money spent on these items quickly adds up and may be what causes you to go over your limit. If the big things like rent are still so overwhelming that you can’t handle it, you should consider moving to a new location with a lower rent. If it’s still a problem after considering this, you may want to try to find some government assistance.

Living within your means can also mean that you have a little bit of money leftover at the end of the pay period for savings and unforeseen emergencies. Having a cushion is a great way to prevent yourself from sinking deeper into a debt trap. Set aside as much as possible so that you have some saved away for hard times. Enough for six months expenses is a general rule, but this is not possible for most people with the current economy situation. Knowing that you have some cash to fall back on will not only help you live within your means but will also keep your stress levels at a minimum.

A big part of living within your means is awareness. Many people are not always aware that they are not living within their means. When you find yourself using credit cards and only paying the minimum balance until the cards are maxed out, that is a pretty good indicator that you are living outside of your means. It is important to be aware of your spending habits and whether or not it is really necessary to spend money.

There are some fairly simple changes that can make a big difference in the amount of money you have available to you. Small things like cutting out the second cup of starbucks during the day or taking your own lunch instead of eating out can make a big difference in your wallet size. It may not seem like much, but all those little expenses add up until they create one large one. While the occassional treat is never a problem, it is important to remember that everything has a price, and you should consider whether or not those little items are worth the price. Will you remember that cup of coffee later on in the week? If it does not have significant impact on you, you may want to consider cutting certain things out all together in order to save the extra money that will be there to help you in the long run.

This post was written by

jason – who has written posts on Budget Clowns.
Father of three and married to a lovely women. Always looking for ways to save money, and invest it properly for my children's future.

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