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Personal Finance: Living Within One's Means--How?

Updated on April 17, 2018
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Joy Levine is a freelance writer, photographer and videographer, while maintaining a real-world job in aviation.

Living Within One's Means--Is it Really Possible Today?

We live in a country (America) that is considered prosperous, even if our economy, as of late, has taken a hit. We are bombarded every day with advertising and marketing to get us to spend our hard earned money on every product under the sun. Electronics are upgraded it seems almost every day, and there is always some new toy or gadget that is impossible to live without.

Almost everyone spends more than they make. Don't have the money now? That's ok, "Charge it!" Buy now, pay later. That has been the name of the game for quite some time.

On the other hand, perhaps this is not you. Some have managed to be very responsible in making decisions regarding what they can and cannot afford to pay, even in these trying times. However, even when we try to be very responsible, despite our best intentions, unexpected events can throw a monkey wrench into our otherwise foolproof plans.

Loss of job, unexpected health problems, a new baby, family issues, car problems... these are just a few in the long list of things that can throw us a curve ball at any moment.

Are you someone who wants to take control of your financial situation? Perhaps one of these unexpected events has happened to you recently or another member of your family. Maybe you are swimming in debt and want to regain control of the amount of money you are spending out in order to get a better handle on things. Or perhaps you are just looking to streamline your finances even more.

Whatever the case, this article will present some straightforward practical advice on how to do just that.

Sink or Swim
Sink or Swim | Source

Make A Plan or Budget

In order to manage your financial situation effectively, you will need to know how much money comes in and how much money is going out, as well as where it is going.

Write down on a tablet of paper how much money is coming in through any income earned by family members. This may include income earned on the job, disability, social security, pension funds, or any other source of sustainable income. Make note of the total household income (income that is combined to pay out for household expenses).

Next, write down all your household expenses. List everything including utilities such as water, electricity, garbage collection, sewer, phone, cable/satellite/internet, and any other monthly expense you pay on a regular basis. Other regular expenses may include car insurance, health insurance, medical payments, etc.

Jot down an estimate for the amount of money you use each month for gas, food, and miscellaneous items. If you're not really sure of how much you spend on these things, it may be a good idea to keep the receipts for all your purchases for a few months. You can use a simple envelope system. Label the different envelopes with "Food", "Gas Receipts", Miscellaneous Purchases", and any other category which may apply. This may be a good routine to keep up, as you may be surprised to learn how much you do actually spend on these items. It might help you to see where you can streamline your purchases.

Always make sure you put necessities first, not luxuries or wants. It's important to maintain proper priorities.

Basically, you will need to determine if you are earning (bringing in) more than you are paying out. If you are, then you are living within your means. If you're not, you will need to see where you can make changes.


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Avoid The Trap Of Always Having To Have The Next Best Thing

Envy is probably one of the most effective marketing tools out there.

When you see a new gadget on TV, even if it only has one feature different than an item we already have, we are already coveting this new item, looking for a way to get it.

When we see our neighbors or friends with new items, we may be tempted to want these same things too. Countless commercials have been made from just such a scenario.

Marketers know how to use this to their advantage. Have you ever noticed when you are standing in line waiting to be checked out, how the shelves next to the check out counter are full of a variety of interesting gadgets? They are never items we really need, yet how many of us have fallen victim to these "impulse" buys? I know I have more times than I care to remember.

How do we avoid this?

We need to keep our lives simple. We all like to experience the finer things in life, but t he simple truth is that if we set our eyes on lobster and fine wine when all we can afford is beef jerky and water, we are going to either end up being very unhappy or in financial ruin.

Be Content With What You Have

One in five children is born into poverty in America, and one in six persons in general is living below the poverty level. The most recent number of families living in poverty was 47.7 million in April of 2013.

We need to be content with the necessities of life. This is hard to do when we are bombarded from every angle with the world of advertising and marketing, promoting instant gratification and selfish behavior. But we must overcome this trap.

If we keep our eyes simple, our lives uncluttered, and we are content with the necessities of life, we will not only be able to save ourselves much financial woes, but it will also make it much easier to focus on the more important things.

Some of the happiest people I've known over the years have been people with little means. They appreciate the real things in life and value family, friends, and things that are not material. I'm not saying that people who are well off can't do the same, I'm simply stating that it is possible to live a simple life and still be happy.

This may be a harder scenario for those who have always been able to keep up with getting all the new things, or being able to buy what you want when you want to buy it. It may not be easy at first, but you can manage it over time. As you concentrate on the more important things, fill your time with meaningful things... family, friends, hobbies that make you happy.

Don't dwell on what you don't have, or can't attain. Simply enjoy what you have and make the most of it.

Avoid Unnecessary Debt

This is one staple truth that everyone knows, yet so many have fallen into the trap of at one time or another, for many different reasons. Whether it has been our own unwise or unwitting decisions, or hard times, or a combination of both, once a person is in debt, it seems impossible to escape.

Referring to credit cards, Time magazine stated: "Once we've got our card in hand, our behavior becomes riddled with irrationalities."

So many times when we use a credit card, we end up spending more than we would if we were using our debit cards, or cash. We rationalize that we have thirty days to come up with the money, so no problem.

Or we get sucked into these credit deals from stores where you make a purchase and it's 90 days same as cash, or 24 months no interest. However, as with everything, unexpected events come up and when we are not able to pay in full by the deadlines then we are slammed with outrageous accumulated interest rates, which is exactly what they are counting on.

How can we avoid this nasty pitfall?

Simply save up money before making a purchase.

The answer seems like a simple one, but putting it into practice isn't as easy as it sounds for most. It takes a lot of strength and willpower.

It may be a little longer before we are able to get the item in question, but you will pay the actual price instead of the high interest rates with it, and your personal finances will not take a devastating hit.


Simple Ways To Cut Back

It may be that we need to find ways to cut back in our budget so we are able to save more.This may, at times, seem like an insurmountable task. However, with a little time and effort, we may be able to make small changes that impact our lives in a big way.

Some of us live in more urban settings. Have you thought about using public transportation at least some of the time? If you're worried about being late, maybe you could use such transportation when you are not meeting deadlines. Maybe you don't feel comfortable using it for work, but perhaps you could use it when you are traveling to the store, running errands, or to the parks or recreation areas.

Can you carpool? This is another option that saves time, money, and the environment.

When shopping, avoid high priced malls or grocery stores. Choose to buy at least some, if not all your items in discount stores such as Walmart, Aldi, Dollar General, Family Dollar, Wal Green, and the like. Some of these discount stores carry the exact same brands and products that you will find at much higher prices in higher end or convenience stores.

Most importantly, always read the labels. Especially with food, always check quantities. You may be able to save quite a lot getting twice the amount for only a few cents more. Buying certain items in bulk may also save you down the line.

Check sales papers and circulars, use coupons, and coupon cards. When you have a few extra dollars, instead of being tempted to buy that item you've been wanting for awhile, save it instead. Something unexpected may come up next week where you will be glad you did.

Try to use credit cards only for emergencies. At the very least, try to pay off all your credit purchases at the end of the month. If this is not possible, try to maintain a slightly more lenient 2 to 3 month rule. If you must make a large purchase, something unavoidable (perhaps a car repair or similar event), try to pay it off in no more than 3 months. Use self discipline and control with any credit purchase, restricting it to only necessary items. Always pay on time in order to avoid late charges and high interest rates.

Rialto Beach
Rialto Beach | Source
Prairie Dogs
Prairie Dogs | Source
Grevy's Zebra
Grevy's Zebra | Source

Recreation And Travel

There are other ways we can live responsibly while still having fun. Just because we must live on a budget does not mean that we can't go out and do anything at all.

Recreation is important for families and individuals. We need this time to refresh ourselves from all the anxieties of every day life. We all need time to recharge and rejuvenate.

How can we do so if are trying to maintain a strict budget?

There are many ways to accomplish this.

Look up local museums or other educational venues in your area. Many museums offer "free" days, free admission on certain days or at certain times. If you live in very urban areas, some parks or venues offer free concerts for local artists seasonally. Watch the papers for festivals in the area that may be free, or require just a slight cover charge.

Visit local parks and use their facilities. Most places do not charge to use tennis courts, basketball courts, baseball fields, soccer fields, etc., unless you are renting out the whole place for one group.

Look up state parks that may be close by. While some of the larger parks like Yosemite and Yellowstone may charge to get in, most do not. Also, all of the national parks waive fees on certain days, so check out their schedules thoroughly and do your research.

There may be many hiking trails, waterfalls, and mountains to explore. You may be able to see wildlife in their natural surroundings without standing in long lines at the zoo.

Speaking of zoos, there are a very few around the nation that are still free. For instance, if you live in the surrounding area or travel to Chicago, check out Lincoln Park Zoo. They have an incredible zoo with quite a variety of animals including a Malayan sun bear, sea lions, polar bears, wolves, reptiles of all kinds, wallabies, kangaroos, and many more, and also a walk through aviary.

You can also look up information on local museums, parks or other places of interests and see what they offer in regards to memberships. At times, the membership price for an individual or family pays for itself in just a few visits, and then you have a place to go to all year long free (if you're not using a lot of gas to get there). This option works especially well for families with children. You will have to determine if you can the price for the yearly membership is an affordable option for your family.

Local skate parks and recreation centers sometimes offer discount family nights, as well, so keep this in mind.

There are also some great entertaining options you can do at home for next to nothing without traveling anywhere. This is especially nice for families with lots of children. Get creative! Design a family movie night. Make it interesting with popcorn, refreshments, and perhaps get the kids involved beforehand. Have them dress up like their favorite character. Or if they are really young, have them draw a picture after the movie is over.

If your kids are into chemistry or science, there are endless websites where you can download detailed instructions for simple, easy and economical experiments you can do with household products you can find in your own kitchen. These are safe experiments that are fun and your kids can learn too.

If you have a backyard, and a little space, go play ball, frisbee, fly a kite, get out the hose or the water guns and blast away at each other in bathing suits in the hot summer. Read together, and have each person be a different character and have them read that character's part. Make it like a reading drama.

Get away from the computers and TV and really have fun doing something entertaining and active.

When you put your mind to it, there are all kinds of things you can do for next to nothing, and at times, these are the things that end up being the most fun and memorable of all.

For a lot more free family fun ideas, click on these two links:

If you have any suggestions of your own, please share them in your comments.

"I Think I Can, I Think I Can, I Think I Can..."

With a few simple steps, and a lot of hard work and self discipline, we can be on the road to financial recovery or maintain financial responsibility in no time. You can live within your means. Be positive and instead of concentrating on all the things you can't have or can't do, focus on what you can do.

  • You can make a successful financial plan
  • You can be financially responsible
  • You can be content with what you have
  • You can be happy leading a simple and responsible life
  • You can avoid unnecessary debt and burdens
  • You can save up money for purchases
  • You can make simple but wise choices every day
  • You can still have just as much fun on a budget
  • You can live within your means!


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