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Everyone enjoys partaking in life’s luxuries from fine dining to travel to expensive clothing and cars. However, no matter how much money you have, it is important to manage your budget and ensure you are living within your means. Failing to do so could result in excessive debt and put you in a very precarious position if there is an unexpected health issue or job loss.  


What Is Living Within Your Means?

Defined simply, living within your means entails spending as much or less money than you make. Though the definition is simple, in practice, living within your means can prove to be a challenge. With credit cards, loans, and even emergency funds, spending more money than you should or reasonably can is easy. Spending recklessly can harm your personal finances as well as your overall financial health, so striving to live within your means can help you have a very healthy financial life and live comfortably with less stress and anxiety about money.


Know Your Finances

One of the most intuitive and important steps in living within your means entails knowing how much you make and how much you spend. Net income (income after taxes), debt owed, average utility payments and other mandatory expenses are just a few of the numbers you will want to calculate. You should be aware of how much you usually spend on things like groceries and entertainment as well as gas, electricity, and heat. Consider using a budgeting spreadsheet or app to keep track of these things. is an excellent budgeting app and allows you to track what you are spending your money on.


Abide By A Budget

Creating a strict budget to account for how much you make and how much you spend will be essential in helping you live within your means. A simple way to establish your monthly budget is by starting with your net income and subtracting your utilities and other expenses. If you end up with a negative number, you will need to adjust how much you are spending. Finding areas where you can afford to spend less (especially on non-essential purchases like takeout or entertainment) can also help you more effectively live within your means. For many people the word “budget” is a bad word.  To make it more palatable, it is important to put a little “fun” spending in your budget.  


Save Money Wherever Possible

Whether you pore over the grocery store circular looking for coupons and sales or you prioritize shopping at thrift shops and yard sales instead of big box retailers, there are plenty of ways you can easily save money without cutting out extraneous spending completely. When possible, buy in bulk, be sure to sign up for free discount cards whenever you can and when tempted to buy something, ask yourself, is this a need or a want?  Even if you only save a few cents or a dollar here and there, these savings add up over time to help you live more within your means.


Securities and Investment Advisory Services offered through Essex Financial Services, Inc., a Registered Investment Advisor, Member FINRA, SIPC.  A subsidiary of Essex Savings Bank. The securities and insurance products offered through Essex Financial Services, Inc. are not a deposit of, or other obligation of, or guaranteed by any bank, or an affiliate of any bank, are not insured by the FDIC or any other agency of the United States, the Bank or an affiliate of the bank and involve investment risk, including the possibility of a loss of the principal amount invested.