What is Living within your means?
Living on less than you make
This means knowing your income and your take-home pay.
Choosing to forego wants in the short term for Financial Freedom in the Long Term
Ruthlessly evaluate your expenses. If you are not living within your means, then cutting costs and/or increasing income will need to happen.
While living within your means is critical for financial freedom, cutting expenses is likely to only be a season while you pay off debt, establish an emergency fund, and evaluate your future financial plans.
Cutting expenses on needs if possible
This includes food, housing, and transportation. While it’s easy to quickly cut costs on food, it’s more complicated (and may not be feasible) for housing and transportation.
For More Tips On how to live within your means, go here.
Paying off debt
Create a plan – whatever works for you!
There are plenty of strategies and ideas around paying off debt. What works really well for one person may not work for you.
I find it’s best to come up with a plan that is likely to work for you and make adjustments if needed.
The most important step is committing to paying off debt. If you aren’t committed to paying off debt, it’s easy to lose focus and give up.
Staying out of debt
Don’t carry debt unless it’s a mortgage, at an amount you know will work for you.
Interest can be a personal finance killer. While there are situations where debt may be necessary, don’t let it sabotage your finances.
Even with a mortgage, make sure you’re the one determining the cost – not your lender!
Why it’s beneficial To you to live within your means
You can stop living for payday
How would it feel to make purchases and financial decisions without constantly considering when payday is?
When you live within your means, and have savings accounts in place you can have more security so that you don’t have to worry about payday.
There may be months with unexpected expenses where you will need to make adjustments, but when you’re living within your means, you aren’t constantly worried if there’s enough money in your bank account.
Establishing a pattern and mindset
Like losing weight, living within your means is a lifestyle change.
Find a budget and rhythm with your finances that is sustainable – being in debt and living paycheck to paycheck is not!
More Security in finances
Living within your means gives you the bandwidth to save an emergency fund.
Having an emergency fund that you can dip into whenever you need alleviates a lot of anxiety for unexpected expenses.
Able to give more
When you’re able to stop chasing your next paycheck, you’re able to donate more money.
This may take some time to achieve, but it is something you can plan for as you adjust to living within your means.
Realize extreme frugality is only for a season
I think the term “frugality” can be a positive or a negative trait depending on your perspective. Some people just don’t want to be “frugal” and there’s really nothing wrong with that – as long as your lifestyle fits in your budget!
While you learn to live within your means, you will probably have to adjust what you’re used to – this is only for a time.
For wants that you still desire, you can plan for it in the context of living within your means.
As you learn to live within your means, you may find that your priorities on how to spend money change.
What does the bible say?
While there aren’t passages that explicitly explain the benefits of living within your means, it is a general theme through many of the “finance” verses.
What a lot of these verses are getting at is contentment. Living outside of your means often is essentially the result of discontentment.
Proverbs 13:11 – Wealth gained hastily will dwindle, but whoever gathers little by little will increase it.
Hebrews 13:5 – Keep your life free from love of money, and be content with what you have, for he has said, “I will never leave you nor forsake you.”
Luke 12:42 – And the Lord replied, “A faithful, sensible servant is one to whom the master can give the responsibility of managing his other household servants and feeding them
Philippians 4:19 – And this same God who takes care of me will supply all your needs from his glorious riches, which have been given to us in Christ Jesus.
Starting to Live Within Your Means
Decide to make the mindset shift
Deciding a change needs to happen can be the hardest part. It will likely take time to create a budget and start making adjustments in your life.
Having a solid reason why you are choosing to make changes to live within your means helps stay motivated.
You do need a plan – with a timeline!
Practical steps
Here are practical steps with further information for how to start living within your means:
Have grace with yourself
Anytime you start a new habit or make a change in life, mess ups happen. You accidentally miss a payment or forget a birthday.
Although it can be discouraging, I encourage you to keep moving forward. Momentary setbacks may happen, but they don’t have to change the course of your finances.
