Live Within Your Means with These 13 Tips

Live Within Your Means with These 13 Tips

Are you struggling to live within your means?

Do you even truly understand what this saying involves?

If you haven’t been taught, it isn’t an ability that most are naturally born with. It takes time, study, and understanding to learn how to keep your lifestyle within the confines of your budget.

Don’t become overwhelmed by this idea. I’m going to share some tips I’ve learned through my own life lessons.

Disclaimer: I’m not a financial professional. These are simply lessons and tips I’ve learned through the school of life! This is not meant to be professional advice. Please seek out a professional for any financial assistance you may need.

Here’s what you must know when embracing the concept of living within your means:

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1. How Much is Coming In?

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To be able to live within your means, you first must know what your means are. Basically, you need to know how much money is coming into your home on a regular basis.

This is going to look different for everyone. Some people get paid like clockwork and make the same amount each pay period.

Others work on commission, piecework, or work for themselves. This means that income is sporadic, and the amounts vary.

I’ve been on both sides of this equation. If you’re part of the latter group, try to average how much income comes into your home on a weekly, monthly, or even yearly basis.

This will help you have a ballpark figure as to what you’re working with.

Need ideas to make more money from home? Check out my post on flexible jobs!

2. Make the Budget to Live Within Your Means

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Once you know how much money you have, it’s vital to create a budget. This will help you organize your finances.

You can create a budget via Google Docs, write it down on a piece of paper, or create a spreadsheet.

Check out this budget planner to help you keep your finances organized. 

I’ve done all three methods. I’m more old-fashioned and prefer to keep a financial folder where I can store my budget (on paper) inside the folder.

However, I keep a copy on my computer as a back-up. Your budget is where you’ll document how much money you make and also all of your expenditures.

This will show you where you stand financially, where you need to make changes, and how much money you have allotted for different necessities in your life.

3. Embrace Frugality When Living Within Your Means

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Once you know where you stand financially, it’s time to make the necessary changes to ensure you live within your means no matter what life throws your way.

Life is funny. You can be up on a mountain, doing well one moment. The next, you’re in a valley and flat broke.

You can avoid such drastic dips by living below your means on a regular basis.

Again, this will look different for everyone. Don’t base your frugal lifestyle by what you see around you. This is not a one-size-fits-all concept.

I need to insert a disclaimer here: Even if you live below your means your entire life, it doesn’t guarantee that you won’t feel financial hurts along the way. You could still end up busted broke.

However, it’s a good idea to embrace frugality by choice instead of by necessity. If you live below your means, it should make the financial hiccups (you may or may not face in your lifetime) a little easier to deal with.   

Read my tips on saving money each month to help you get started with a frugal lifestyle.

4. Try to Avoid Debt to Live Within Your Means

It’s important to try and avoid debt. This can be difficult because in our current society much of what we do is based upon our credit history.  

Therefore, you might deem it a good idea to keep some type of credit rolling on a regular basis.

However, you must be responsible. My husband and I maintain credit through a car payment, house payment, and we put as many of our monthly bills on credit cards as possible.

This ensures the balances get paid every month, but it also keeps our credit scores in a healthy range.

If you carry debt, you should be intentional about it and make sure it doesn’t grow out of control.

5. Have a Plan to Live Within Your Means

There are some cases when going into debt may actually be the smarter move. A few examples are purchasing a home or purchasing certain items with 0% interest.

When buying a home, you should make sure you have plenty of equity in the purchase from the start. This will make sure you’re never upside down in your purchase.

If something happens that throws your finances through a loop, where you need to get rid of the house, you should be able to. It could also help rectify your financial problem because of the positive equity you hold.

0% interest is another way of ensuring you save for an item. We’ve used 0% interest loans to purchase a tractor and when installing a DIY pool. This made sure that the items we needed or wanted were added into the budget and couldn’t be pushed off if life threw us a curve ball.

However, if you purchase an item for 0% interest, make sure you have a decent down payment, or you have the cash to backup the loan in case life gets tough.

6. Develop the Mindset of Living Within Your Means

Living within your means is a mindset. It doesn’t have to be hard, but it does include financial maturity. You shouldn’t run around racking up debt for things and not have a plan on how you’re going to pay them off quickly.

If you’re basing your whole financial security around affording minimum payments, you’re racing towards a problem.

Therefore, get in the mindset of saving, spending less, paying down debt quickly, and putting away your credit cards.

Operate on cash as much as possible and be determined to not spend more money than you’re making. The goal is to actually spend much less than what you make.

Let this cash envelope system help you!

Get in this mindset, and you’re well on your way to living comfortably within your means.

7. Saving is Important When Living Within Your Means

If you aren’t saving, you aren’t living within your means. It took me years to learn how to save money when raising a family.

In our early years of marriage, it was easy. There were only two of us, we were healthy, and we had two incomes.

When you add kids in the mix, there’s always expenses. It’s worth it, but it can still be hard to learn how to juggle all the added financial responsibility.

Don’t get some percentage or figure in your head. Instead, see what you can realistically save from your budget.

If it’s $5 per week, be thankful. If you can do more, that’s great too.

The idea is to make sure you’re saving something every time you get paid and developing the habit of saving.

You can use this savings account as an emergency fund, a new car fund, a house fund, part of your clothing budget, or as a nest egg for the future.

8. Cars

Cars are such a difficult thing to deal with in life. You need a reliable car, but you don’t want to be strapped to some massive car payment for ten years.

You can use the Dave Ramsey method where you pay cash for cars and keep trading up until you get the car you want and avoid a car payment.

This may not work for you, though. Only you know your financial situation.

To stay within your means when purchasing a car, make sure you provide enough of a down payment that you’ll have positive equity in the vehicle.

Many people get in trouble with cars because they make choices that put them upside down. Try to have a dependable car, with either no payment or an affordable loan you can pay off quickly, and don’t owe more than the car is worth.

9. Vacations

There are a variety of ways to take vacations on a budget. If you can afford to vacation while sticking within your means, you should take the opportunities available to you to get some enjoyment out of life.

Make sure you don’t overextend yourself. Vacations are meant to be enjoyable, not wreak havoc on your finances.

Do your research to ensure that you can take vacations without blowing your budget.

Living within your means is all about balance. You can’t be so busy working to build a life that you forget to actually build a life.

But you can’t be so careless with everything you work for to throw it away because you want to live the high life a few weeks out of the year.

Again, only you know your finances. Strike a balance on vacations to ensure you stay within your means.

10. Clothing

Clothing is another item that can throw people through a loop when they’re trying to live within their means.

Clothes are a necessity, but they don’t have to destroy your budget.

Be sure to incorporate clothing into your budget. Once you know what you have to spend, be sure to shop sales, use coupons, or purchase second hand.

Budgeting for clothes was always difficult for me once I had a growing family. I made sure to save all of my kids’ clothing to pass down.

I also stopped trying to buy full wardrobes at the start of each season. Now, I budget $50 per week for clothing.

At the start of each season I make a list of what my kids need. As sales come around, I pull the money from savings and buy what they need.

I usually save more money than I spend on clothing, but it ensures I always have money on hand to purchase clothes for our family.

11. Food

Groceries are one of the biggest budget busters. There are a variety of ways to save money when grocery shopping.

Shopping sales is important, not going to the store hungry, and figuring out how to grow a few beginner crops are all great ways to save money when grocery shopping.

We started quarterly grocery shopping a while ago, and it has saved us a ton of money. Figure out what methods of grocery shopping work for you.

Whatever works for your life and keeps you living within your means is what you should do. There’s no one-size-fits-all.

12. Your Home

Where we live is another important expense that can either keep us living within our means, below our means, or above them.

We’ve always lived below our means when it comes to our homes. The reason being is my husband is extremely gifted with carpentry skills, and I enjoy designing things myself.

Looking back, we could’ve built a house, but our dreams have shifted as we’ve gotten older. We started life in the suburbs.

Next, we moved to a fixer upper home in the country. It was a gorgeous home by the time we sold it.

Our last (and hopefully final) move was to a small farm. The house wasn’t in disrepair (per say), but it wasn’t glamorous either.

We’ve spent the past three years transforming this home.

Why do all of this work? Because I’d rather pay cash for my upgrades and not be stuck with a huge mortgage for the next 20-30 years for a turnkey property.

You must decide what works for you and your budget. Renting could be a solid option until you save enough money for a down payment and figure out what type of house would work best for you and your family long-term.

Moral of the story: Don’t be afraid of a little bit of work when it comes to purchasing a home. It may not be within your means to buy the glamorous house your heart desires.

Yet, there’s nothing that says you can’t purchase a less expensive home and pour into it over the next decade to make it what you want.

This method may make it easier for you to live within (or below) your means and own a home sooner.

13. Think About Your Future When Living Within Your Means

Our last stop on the “Live Within Your Means Tour” is to consider your future. It’s important to save for a rainy day.

You should invest in your home to help build equity. There are other things you should invest in as well.

Consider life insurance and retirement. If something unexpectedly happens to you, your family needs to be covered.

If you’re fortunate enough to live to an older age, you’re going to want to retire at some point. Make sure you’re making wise choices now to ensure these areas are covered.

These items should be included in your budget, but you should make sure that when you’re working towards living within your means that you don’t ditch these items in an effort to save money.

Your future matters.

I hope these 13 tips help you wrap your head around what it means to live within your means. There are great programs out there to help you dive deeper into wrapping your head around your finances.

Living within your means ultimately comes down to your situation, your goals, gaining wisdom, and utilizing discernment.

Remember, these are only tips. If you need help budgeting or financial planning, seek out a professional.

Good luck as you embrace living within your means!

Are you striving to save money, live within your means, and become more self-sufficient in the process? Check out these helpful tips!

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