How to Live within your Means

Since the day we all turned eighteen, the credit monster stalked us. We were its prey and we eventually succumbed to it, leading us to believe we could pay for things that were beyond our means. Whether it is a student loan, credit card, car loan, or a mortgage, we all used credit to purchase something that we couldn’t immediately afford. So how do you slither out of credit’s grip and rely on your own income? How do you live below your means and save for large purchases on your own? It is possible, and you may not have to alter your lifestyle too much to afford it.

First, ditch the credit cards. My grandmother once gave me a few simple rules for using a credit card. First, pay off your entire balance at the end of each month. This eliminates the worry of interest accrued on your balance. Second, never purchase gas, food, or anything that you will consume before you get your bill. People don’t want to pay for things that they have already consumed. Although these rules are seemingly simple, I was unable to keep them. I bent, and eventually broke, them over and over. I lacked the self-discipline to adhere to these rules. For me, the solution was simple, get rid of them! Why should you have to try to control yourself when it comes to spending money that isn’t yours? It is nearly impossible not to give in to the occasional impulse that can end up costing you dearly.

If you do need to keep a credit card, for emergencies of course, make sure that the limit is very low and that you use it only in desperate times. Make sure you have a clear definition for what an emergency is. This can be an unexpected car repair bill or that $100 co-pay at the emergency room. It is not, however, an emergency when you forgot to bring cash on your Starbucks run.

The second thing you should consider is negotiating your monthly bills and premiums, ultimately paying less for services that you already receive. This is relatively simple and should take approximately a few hours to complete. Start by calling your utility companies and ask if you qualify for any discount programs or other free services. Some energy companies offer free weatherization assistance and low income discounts.

Next, call your credit card company and see if you can negotiate for a lower interest rate. This could take some time and you may have to speak with several different agents, but threatening closing your account may have an impact.

Dig deep, shop around for discounts for your car insurance, cable, satellite, and phone services as well. Usually your current providers will be able to offer you a deal if you explain to them that you are considering changing providers.

The next step is to cut back where you can. For example, I made the hard decision not long ago to forgo the television service altogether and rely solely on the internet for keeping up with my favorite shows. Most networks post their shows online and it is free. Netflix is also a great source for watching movies and complete television series online. Their cheapest plan is $8.99 a month and includes unlimited access to their online collection.

Food was my largest expense. With four children, I’m sure you can see why. Often this expense was more than my rent! Planning ahead is essential. Simply planning out meals will save you plenty of cash and keep you out of the drive thru. An online calendar is great for this task. Simply fill it out, print it, and email it to household members. This way there is no question as to what’s for dinner and making a list for the grocery store is easy. Stick to your list! Deviating from it can be disastrous to your budget.

You budget is the final step. Once you have your new expenses settled, the next step is to implement a new budget. I know many people hate this word, but it should not confine you, but liberate you by keeping your mind free from worrying about where the money will come from for each bill. Your budget does not have to be a monthly one. Personally, I use a weekly budget because I have money that comes in weekly.

It is best to first figure your yearly expenses, so that you include special expenses such as seasonal and birthday presents, car registration, and club memberships (which you might also want to cut back on or eliminate completely). After you have done this, divide that number by 12, 26, or 52, depending on how you plan to budget. Create another online calendar that tracks the due dates of your bills and check it daily. This is imperative if you don’t want to end up with overdue fees. Paying your bills online will also help save you money. Not only will you save on postage, but possibly bank fees as well. Checks are often harder to track, especially if you don’t keep a paper register. Using an online financial management program such as or will update your bank accounts and keep track of your expenses for you and make this process easier.

Living within your means takes a great deal of planning and rearranging, but once your plan is in place, keep focusing on what’s really important, rather than what’s more convenient. Buying on credit is not a necessity or a given. It is possible to save money yourself and rid yourself of the credit monster forever.