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Learning to Live Within Your Means Without Debt

With more people in debt than ever before, living within your means is a concept well worth exploring. First, what does it mean to “live with your means without debt”? Living within your means signifies being on top of your finances. It means knowing at the drop of a hat exactly how much you can afford. It means a low-stress financial outlook and lifestyle where you don’t stay up late into the night trying to figure out how to pay for that new jacket, car, vacation or whatever your weakness may be.

Here are some tips for adopting the philosophy of living within your means and learning the joy of living without debt.

Spend less than you earn

This is a simply mantra that you should adopt in your quest to live within your means without debt: spend less than you earn. It really is that simple. Most of us, however, do the exact opposite. Spending less than you earn means you have to sit down and face the cold hard facts of your current financial template. Sit down and do some simple math: how much gross income do you take in a month. Next, subtract how much you need for life essentials. Life essentials include putting a roof over your head, food in your body and clothes on your back. Some financial gurus have come up with specific numbers on how you should ideally be spending your money each month.

How are you spending your money?

Here are the numbers on how the experts say you should be spending your hard-earned money each month. You should be spending 35% of your monthly income on housing and housing related costs. Transportation costs should equal around 15% of your monthly income. Shopping, food and entertainment should come in around 25%. According to financial experts, around 15% of your monthly income should be directed at quashing any lingering debt. Finally, don’t forget to pay yourself. Roughly 10 % of your monthly income should be directed into a savings account.

Study your numbers

Now that you have the numbers, do the math and see how your monthly spending stands up. Are you spending way more than you can probably afford on your monthly rent or mortgage payment? Are you splurging on your entertainment budget or spending half your income on shopping sprees? Are you paying off enough debt each month to really make a dent on those credit cards, or are you merely paying off interest? Are you saving anything for emergencies and the future? These can be hard questions to answer, especially if you have a sinking feeling that the answer is a resounding “no” on all accounts. But this is also a very important step to take if you are serious about living within your means without debt.

Secrets to living within your means without debt

These are not really secrets—most people who are debt-free or serious about becoming debt-free can find these out for themselves. The true secret is to live below your means. That is, spend less than you make. A lot less. How can you do this? Try to attack the problem from the angle that you already know needs attention. For instance, if you are a shopaholic, work on curbing your shopping sprees by making a written list of only the items you need before stepping out the door. Cross off each item as you shop. Also, consolidate all of your shopping needs into one trip, rather than smaller shopping trips spread throughout the week. Always buy the store brand, which is usually just as good as the name brand and a lot cheaper.