3 Ways To Live Within Our Means (Without Feeling Miserable)
We’ve been conditioned to believe that financial discipline means saying “no” to everything fun. But here’s the truth: Living within our means isn’t about deprivation. It’s about freedom. It’s the difference between lying awake at 3 AM worrying about a credit card bill and sleeping soundly because we control our money—not the other way around. It's about knowing the difference and the affordability between needs and wants based on our finances.
Whether we’re working to get out of debt or trying to avoid it altogether, here are three strategic ways to living within our means.
1. Master the Math: Expenses Must Always Be Less Than Income
This sounds obvious, but it's something many people struggle with because spending is often emotional.
The first and most important rule for living within our means is The 50/30/20 Rule:
- 50% for Needs: Rent, utilities, groceries, insurance, minimum debt payments.
- 30% for Wants: Dining out, streaming services, hobbies, and entertainment.
- 20% for Savings & Extra Debt Payment: Emergency savings, retirement, and extra principal on loans.
At the same time, it's important to be honest about what's sustainable. If neccessities are taking up most of our income, it may be a sign something needs to change:
- Increase income through side hustle or career move.
- Decrease expenses (downsizing housing, transportation or subscriptions, etc).
*Action step: Write down your monthly net income (your take-home pay). Then subtract all of your expenses, including any current debt payments.*
- If the amount left over is zero or negative, you’re spending more than you can afford.
- Focus on paying down existing debt while reducing unnecessary spending, such as food delivery, unused subscriptions and memberships, or impulse purchases.
Even small cuts can add up and make a meaningful difference over time.
2. Treat Debt Seriously (Pay It Off Consistently)
Living within our means becomes much harder when we’re still paying for purchases from months or years ago. Debt limits future choices, so reducing it creates more financial breathing room.
The “On Time” rule:
Always make payments on time. If paying in full isn’t possible yet, setting up automatic minimum payments can help avoid late fees and credit damage.
The “Consistent” rule:
Minimum payments alone are a trap and can keep debt around for years.
Two common approaches to pay off debts are:
- The Avalanche Method (Mathematically best): Focus extra payments on the highest interest debt first to save the most money over time.
- The Snowball Method (Psychologically best): Focus on the smallest balance first to build momentum and motivation.
As debt is paid off, more of our income becomes available for savings and future goals. For example, once the car loan is cleared and the mortgage is fully paid, that money becomes ours to keep. Until that debt is zero, we are not truly living within our means—we are living within the bank’s means.
3. The Golden Rule: Borrow Carefully and Intentionally
Remember debt is a tool, not a lifestyle and it can be useful in certain situations.
Borrowing makes sense for:
- A primary residence (a mortgage, because housing generally appreciates).
- Education or transportation. that supports long term inome opportunities.
Everything else is a want, not a need.
The “Vacation Test”: Before you swipe that credit card for a new iPhone, a sofa, or a weekend trip, ask yourself: Would I take out a payday loan to buy this? No? Then don’t use a credit card for it either. Credit card debt is a high-interest loan.
The 30-Day Rule: Want to borrow for a new TV or a wardrobe upgrade? Wait 30 days. Put the cash you would have spent into a savings account. At the end of 30 days, if you still desperately want it, pay with cash. If the cash isn’t there, you can’t afford it.
The emergency exception: We borrow only when an unplanned, unavoidable event occurs (the furnace dies in January, the car transmission fails). For everything else, we build a $1,000 emergency fund so that we never have to borrow for a minor crisis again.
The Bottom Line
Living within our means isn’t about perfection or punishement. It's about creating stability and flexibility over time through small consistent decisions.
- Spend less than we earn.
- Set aside some income for emergencies and long-term savings.
- Borrow thoughtfully and only when necessary, not for wants or desires.
- Escape debt like our future depends on it (because it does).
The reward isn’t recognition or a pat on the back. The reward is waking up one day and realizing that a broken washing machine is an inconvenience, not a financial crisis. The reward is being able to leave a toxic job because your savings give you options. The reward is knowing you can retire comfortably one day, debt-free.
That's what living within our means can truly buy and provide - peace of mind.
And if you haven’t checked in on your finances lately, today is a great day to start. Your future self will thank you.
"True peace of mind begins when you live simple. Own your life free from debt and financial worry." - Mimi Low
