Living within your means a means to a better life, not a miserable one

I hear the phrase “live within your means” being thrown around a lot nowadays. The phrase has been around for some time, as the meaning is to live according to your measure of wealth. Why is this important to the quality of life at all? That is a good question, as finances are an integral part of our lives. They determine the kind of lifestyle we have.

I think it is first to differentiate between your life and your lifestyle. Your life is your actual existence, your being and very essence. That is not dependent on your finances, career or other circumstances. Your lifestyle is how you live. This can include what kind of clothes you wear, food you eat and how you like to entertain yourself. That is dependent on your finances and is where I want to apply the adage in focus.

Living with your means starts with recognizing your current financial status. This includes the amount of debt you owe and what your monthly income and expenses are. This seems really simple but many people in this age of celebrity snap stories deceive themselves into thinking they are wealthier than what they actually are. You have to be honest with yourself before you can better yourself in any way.

After you have determined your current financial status, you need to take a more detailed look at your monthly expenses and income report. Am I spending more than I am bringing in? How much am I spending on certain expenses? This is where it gets very real. For example, say you bring in $2000 per month. You pay $600 in rent, $100 in utilities, $100 on food, $60 on gas and $100 in student loan payments (I am giving you a paid off car in this scenario, how thoughtful). You are left with $1040 for the month.

Let’s say that you have a cell phone, which you pay $60 per month for service. Then there is pesky car and health insurance, another $300 gone. You are ok, you still have $680. You think to yourself, “I can make it on that.” Perhaps you can if you stay in those “within means” boundaries. However, if you decide to buy the new video game console which costs $400 or a new wardrobe which costs $500- you are looking kind of thin this month. You would have just a couple of hundred dollars. Heaven forbid a car repair or another unexpected expense rear its ugly head.

From this scenario I drew, the lesson to draw away is recognizing need from want. You need a place to live, food, insurance and some form of transportation. Do you really need the new console or wardrobe (yes, I know the graphics are amazing and the jacket is cute, but be real with me). Rather than blow the money for that coveted item at one time, make a monthly allotment to save up for it. Take $100 from that $680 each month to go towards that console. It will be yours in just four months. In the meantime, also take another $100 for long-term savings. You will have $400 put away for a rainy day or your future retirement. Not to mention the exponential growth you will experience later on if it is in an interest growth savings account or other fund.

I recognize how hard this is. Our society pressures us in many ways to keep trying to get as much as we can and keep up with every current trend. This way of living requires self-discipline, self-control and will take some time to develop. However, it is doable and the benefits are tremendous. Living within your means keeps you from being without a safety net when hard times hit, which is often when people end up getting placed in debt or other financial hardship. Most importantly, you can have more peace of mind which is beyond any monetary value.

Real luxury is not working like a maniac to take an expensive vacation–it is living a life you enjoy every day.”
Kathy Gottberg

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