There is a Lot to Be Said for Living within Your Means


How many of us have been caught in the trap of thinking that life would be better if we just had more money? Let’s face it, money problems are not that unusual. We all go through them from time to time. The real difference is in how we address those problems. Some people manage to overcome rather quickly; others seem to have money problems their entire lives.

What would you say to the idea that the root of most money problems is living beyond one’s means? Though there is no hard data to prove as much, it is worth considering in your own circumstances. Why? Because if living beyond your means is the root of your money problems, the solution is fairly simple: rein in your lifestyle until you are back within your means.

The Budget Conundrum

You have probably heard many times how important budgeting is. This is no accident. The best money managers know that budgeting is the foundation of healthy finances.

Ironically, an average of 97% of women and 90% of men say that everyone needs a budget. Yet just 67% of adults actually live on a budget. That’s crazy. What is even crazier are the reasons people give for not living on a budget:

  • They do not earn enough to warrant budgeting
  • Budgeting is too time-consuming
  • Budgeting is only for special circumstances
  • They do not believe they overspend
  • They earn enough that they do not have to worry about it.

There are those financial experts who say you don’t need to budget as long as you are saving money with every paycheck. As the thinking goes, saving what you need to save allows you to treat the rest of your income as disposable. This may be true in principle but adopting such a strategy is still budgeting. You are deciding how much to save and how much to spend. You may not have written down a formal budget on a piece of paper, but you have done the same thing in practice.

Understand that budgeting forces you to live within your means. Living within your means eliminates the temptation of taking on too much debt. By extension, limiting your indebtedness alleviates a lot of the pressure that comes with living outside your means.

Setting Reasonable Financial Goals

Living within your means also affords you the opportunity to set and achieve reasonable financial goals. Your financial goals are both short- and long-term. Short-term goals are things like establishing a rainy-day fund, saving for your next vacation, making extra payments on your mortgage, and the like.

Long-term financial goals are things like fully paying off your home, saving for a child’s education, and completely eliminating credit card debt. Reaching your long-term goals should eventually lead you to living a debt-free life. If you haven’t guessed by now, living debt-free is the most satisfying result of living within your means.

This takes us back to budgeting. It is very difficult to set and achieve financial goals if you are not living on a budget. The thing to understand here is that a budget is nothing more than a spending plan. It is a plan that accounts for how much money you have coming in as opposed to what is going out.

Whether you write down a detailed budget accounting for every penny or simply adopt the philosophy of saving a certain amount with every paycheck and then spending the rest, you have to know what you have coming in. You have to know how much you are spending. Otherwise there is no possible way for you to know that you are living within your means.

No Longer a Slave to Debt

Another big benefit of living within your means is no longer being a slave to debt. Think about that for just one minute. Every outstanding debt hanging over your head dictates how you live to some degree. For example, take your mortgage. Did you know that you do not really own your house as long as you have mortgage debt outstanding?

Your name might be on the deed, but the bank has a financial interest in your house for as long as you owe. Miss a few payments and watch what happens. Your bank will foreclose on your home and sell it. You know that, which is why you go to work every day. You work to earn money to pay your mortgage.

If you could retire today and live the rest of your life on a beach in the Florida Keys, would you? You cannot because you have bills to pay. In essence, you are a slave to your bills. You work to satisfy them. The more debt you have to pay off, the greater your enslavement. Eliminate your debt and you are suddenly more free than you have ever been.

Less Family Stress

Financial problems are one of the leading causes of stress in families. Husbands and wives fight over what to spend money on. Couples get themselves in over their heads and then find themselves stressed out by the consequences, which leads to fighting over money.

Living within your means tends to alleviate that kind of stress. As already demonstrated, living within your means reduces indebtedness. It reduces enslavement to your bills. Live within your means and you will find that you and your partner have less to fight about.

Live within your means and you’ll also find out that you and your spouse will agree more often on how to spend your money. You will both enjoy your stress-free financial situation so much that you will not want to risk jeopardizing it. You’ll happily control your spending just to avoid the stress that took you so many years to overcome.

There is a lot to be said about living within your means. So few of us do it, which is a shame. If we all learned to live within our means, a lot of our money problems would simply disappear. It is really pretty simple.