What does “Living within your means”, mean?
It means you cannot afford your lifestyle without borrowing from someone or somewhere.
3 Indicators:
If you are relying on credit (lines of credit, mortgage consolidation, credit cards, friends/family) to get by each month, you are living above your means.
If you are relying on friends and family (donations, yearly gifts from generous parents and so on), you are living above your means
If you cannot pay your own way for even ONE day a month with the actual cash you have in your bank account each and every month, you are living above your means.
3 Steps to Stop:
Cut yourself off from all lines and accesses to credit.
Look at your net take-home pay per month (whatever is deposited into your bank account by your employer, after taxes & any retirement savings)
Make your net take-home pay match your expenses and savings to balance to $0.
E.g. if you bring home $2000 net a month, you should only spend and save $2000 a month. Not a penny more or less.
(P.S. Did anyone catch how many times I had to write “means” or “mean” in the post above? Winner gets… the satisfaction of being able to answer this question.)
Just a girl trying to find a balance between being a Shopaholic and a Saver.
I cleared $60,000 in 18 months earning $65,000 gross/year.
Now I am self-employed, and you can read more about 
I was always taught to live below your means. As Lynn said, one major set-back, and your back using credit cards or asking to borrow from someone. It’s difficult, and not something I have accomplished, but the best scenario is to live well below your means and establish a substantial savings. And in my opinion, one credit card for safety (i.e. unexpected funeral expenses -my own personal experience) is no big deal. Just so long as you can control your spending habits.
Wow, thanks for the stunningly original, well thought out post. Borrow that from Captain Obvious, did you? If you’re going to publish filler when you’re on vacation, at least admit it and post pictures of cute kittens, or something that requires more thought than this “if you’re living above your means, stop using credit.”
What’s the name of YOUR blog?! I can’t believe the nasty tone you’ve adopted! Why don’t you tone it down a bit? You’ve created a really unpleasant response, and if you’re so unhappy with the content, why don’t you just check out and stop following?
I just presumed she accidentally wrote cannot instead of can.
I try to remember that income is usually ok to use as a synonym for means. It’s not entirely accurate if you’re willing to eat up savings but for most people it’s good enough and keeps my writing from sounding repetitive.
Also, Kskaare is right. You say ““Living within your means”, mean? It means you cannot afford your lifestyle.” Which is the opposite of the truth. Living within your means is spending less than you earn.
Are you sure your first sentence is correct? “Living within my means” = I can pay for my lifestyle w/o credit. Living ABOVE my means= I cannot. Living BELOW my means= I can pay for my lifestyle w/o credit and still save money.
Interesting to think about where you draw the line between within & above your means. Someone who’s expenditure each month exactly matches their income is technically living within their means… until their car breaks down and they don’t know where the money to fix it’s going to come from.
So I guess really to make sure you can live within your means you should have savings too but I don’t know how much!
Estimate what % of the time you’ll be unemployed and amortize it into your budget.
Estimate the replacement and repair of car and home repairs and amortize those costs into your budget.
Similar with medical.