Living Within Your Means: How Not To Spend More Than You Earn

It is a rare thing to find people who live within their means. It isn’t so rare, however, to find those who are battling debt. Being able to acquire things on credit panders to our want for more, more, more and now, now, now. Things would be a whole lot simpler if we learned the simple skill of living within our means.

What does this mean exactly? It means spending less than what we earn. I know that life happens and sometimes we need to fork out a lot of money. Perhaps the car broke down or our children had an unexpected health bill. These expenses are necessary, but if we live consistently within our means – or indeed, below them – then these unpleasant surprises don’t have to break the bank.

How Do I Live Within My Means? 

1. Know What You Earn

It is very difficult to spend less than a particular amount if you don't know what that amount is. Whether it's weekly, monthly, or an annual amount, make sure that you're familiar with what money is coming into your household to cover your expensive. 

2. Know What You Spend

Are you aware of where your money goes? Utility bills, education fees, food, shopping, and entertainment. What else? If you don't know how much you spend on a weekly basis, set yourself the goal of keeping a spending diary. 

Grab a notebook— or an excel spreadsheet! — and make a note of everything that you spend money on everyday. Do this for a month or two. You may be surprised to see where some of your funds go. 

3. Recognize Where You Can Cut Down On Costs

In all the areas that you spend money, are there any you can cut down on? You may argue "no" and this is okay, if you're spending less than what you bring in. If you're spending more than what you earn, you're headed for trouble. 

There are two possible solutions to this problem. The first is to cut down on your spending. Maybe you're going to have to sacrifice that delicious coffee each morning or change shampoo brands to cut costs. The good news is, it's completely up to you to decide what you can do without. 

Just can't? Well the second option is to bring in more money. Perhaps it's time you approached your boss for a raise. Maybe your savings aren't earning you as much interest as they could be. Maybe you could pick up an extra shift, or another job. Think outside the box.

4. Save

It's not just important not to spend as much as you earn, but to spend less than this. If you're going to find finances easy in life, then you need to be able to live below your means and save for a rainy day. As we know, life happens and it's unpredictable!

Starting to save now means that you have funds put aside for any emergencies. It also means you have funds to invest in opportunities. This may be travel related, purchasing a house or car, or education related, or maybe even starting your own business. Although it shouldn't be the only way you feel secure in life, having a nice little nest egg is a great thing to accomplish and build on. 

It is so easy to spend money. Be wise with what you earn and how you invest it. Don't waste it when the result is not having enough or acquiring debt. Live within your means and save for your future.