How to Live Within Your Means

Personal Finance Blog - How To Live Within Your Means

Living within your means is more accessible than most people make it out to be. It does require a dose of discipline, but it can be well worth the effort.

At the very least, living within your means will mean that your financial situation will not burden you with a heavy debt load to manage, and you will be able to sleep at night.

Pay Down Debt Whilst You Live Within Your Means

If you have previously struggled with debt, especially credit card debt, consider cutting up those cards and cancelling the accounts. This is the best way to ensure you do not get into trouble with spending more than you earn.

Don't try to keep up with the Joneses. Just because your neighbour is always buying the latest gadgets, and has a fancy new car each year doesn't mean you need to do the same.

Many people don't realise that those neighbours often do not live within their means. Eventually, they will run into trouble as they have too much debt, but they also have the wrong money mindset.

If you happen to be saddled with a considerable amount of debt, consider consolidating all of it into one lower payment. The interest on credit cards can be brutally high, which makes it seemingly impossible for most people to get out of the situation. Refinancing to a lower rate of interest, it will make it easier for you to get yourself out of that situation.  Cancel the accounts that had balances that have now been refinanced.  If you do not do this, then you will make your financial situation worse.

Dealing With Emergencies

When you are working out your debt repayment plan, whilst you must ensure that you are repaying your debt as soon as possible, you still need to live!  Not only do you need to spend money on everyday items like household expenses and food, but you may also need to pay for unexpected repairs or need to replace appliances in your home.

Funding for these emergencies should not be put on credit cards, and this is why you should start to set aside some cash each month as an 'emergency fund'. Try to accumulate five to six months' worth of money for these emergencies, or if, for some reason, you need to be off work and not earning.

Consider using layaway plans for high-ticket items that aren't needed right away. In the days before credit became available to the masses, this is the way people purchased such items.  Many retailers have brought this feature back, knowing that many people are overextended with consumer debt.

Money Allocation

One last tip to help you live within your means is to create a budget. Having a monthly budget is not a punishment for yourself but a great aid to helping you allocate your funds to where they need to go.

If you are interested in learning more about creating debt repayment plans, savings plans and a budget, grab a copy of my eBook - Organise Your Money in 8 Simple Steps.


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