Part 1

What does the phrase “living within your means” mean? It means to live within a budget that you can afford and not overextend yourself financially.  This is really the core belief for anyone that is financially independent.  Most people have a steady paycheck so they know how much money will be coming in every month.   Let’s say you get paid 2x a month and each paycheck brings home $1000.  You are bringing in $2000 a month.   Now you have to figure out how to split that money so you have enough to survive.  We all need a roof over our head.  We all need some form of transportation to get to work and most importantly, we need to eat.  So take all these factors into consideration and this is where you decide what kind of lifestyle you can afford.  If your rent is $800 a month, you have $1200 to play with.  Your car payment is $150 and your car insurance is $50.  That leaves s you with $1000.  Here is where most people have an issue.  They get the cup of coffee and donut every morning, they go spend about $10 a day for lunch and for diner they go out and spend another $20.  If they did that every single day, there would be $20 left at the end of the month.  So towards the end of the month when they realize that the checking account is getting down to double digits, they stop going out all together so they can afford to pay the cell phone bill or whatever.   This is called living paycheck to paycheck and it caused many people lots of grief and heartache.

Tags: budgeting your money, buying coffee every day, buying coffee every morning, living paycheck to paycheck, living within your budget, Living Within Your Means, obtaining financial independence, save on eating out, saving money, tips