Living within your means is a great requirement for financial freedom. Statistics show that 47% of millennials would struggle to come up with a huge amount of money to cover an unplanned expense. Yet nearly half of today’s workers are living paycheck-to-paycheck, with no financial cushion whatsoever, and a big part of the reason boils down to living beyond our means.

Now you might be thinking: I work hard for the money I earn, so shouldn’t I spend it? And there’s some truth to that. We all deserve to enjoy the fruits of our labor, but many of us take that to an unhealthy extreme by not only spending every penny we bring home, but exceeding our earnings and racking up debt.

Working adults are generally advised to save 10% of their monthly income for emergency savings or retirement. If your expenses are such that there’s absolutely no money left over each month to stick in the bank, it’s a sure sign that you’ve adopted too costly a lifestyle.


To “live within your means” means that what you spend each month is less than or at least equal to the amount of money you bring in each month. For many people, it’s a lot easier said than done. Credit cards, loans, savings, and even emergency funds allow you to buy more things than your income would allow. Unfortunately, that kind of lifestyle isn’t sustainable and, at some point, your reckless spending will catch up to you.

Getting started on planning your finances and adhering to your personal financial plan day in and day out can be a bit of a challenge — especially at first. But, as time goes by, it becomes easier and ultimately a positive, life-changing experience. As you gain control over your finances, you will have an enhanced feeling of personal empowerment and a more comfortable, and less stressful existence. Train yourself to be financially responsible and live within your means now and it will serve you well when you are retired and living on a fixed income for life.

Here are a few proven tips to help you live within your means and become truly financially independent.

  1. Know how much you make

If you want to live within your means, you have to know what your means are. Knowing your annual salary isn’t enough to help you live within your means. You need to know the net income that appears on your paychecks. You also need to know how often you get paid. Since most of your bills are paid monthly, you’ll need to know how much you get paid every month. Multiply weekly payments by four and bi-weekly payments by two to get your monthly pay.

2. Tax yourself 10-20% of every paycheck and put it into a savings account:

This is simply keeping a fraction of your salary/ monthly allowances to either save of invest. Say if you    earn N 100,000, you will be saving 10% which is N 10,000 or N 20,000 if it is 20%. This will help you set aside a reasonable amount of money for emergency and for the future. Chances are as the months go by, it will become harder and harder to continue to save but that is where discipline come to play. You have to remember why you got started in the first place. The end goal is all that matters.

3. Spend less money than you bring in

Once you know how much you make, then you can focus on reducing your spending to fit your income. If you don’t have one already, use a budget to plan your expenses and use it to keep your spending on track. Avoid unnecessary and excess spending like large cable or cellphone packages or gym memberships; avoid anything where you are locked into a contract. If you’ve already tried budgeting and it didn’t work, try it again. Sometimes you just need to make some minor changes to your budget to get it to work.

Sometimes budgeting in a stressful financial situation is overwhelming. Try a method called “backwards budgeting.” Write down your income, then start subtracting each expense you pay each month. If you get to a negative number, then you’re spending too much.

4. Boost your income

If your expenses are at the bare minimum and you’re still spending more money than you make, then you make need to boost your income. If you typically get a tax refund, you may be able to adjust your tax withholding to get more money in your paycheck. You should also make sure you’re signed up for the right health, disability, and other company provided benefits. Finally, you may need to get a higher paying job or even a second job to help make ends meet. The key is to do what you need to do to make enough money to pay all your necessary expenses.

5. Don’t try to keep up with the Joneses or the Hiltons

Resist the pressure to have the same material things as the people around you and even the people on television. You may be able to use credit cards and loans to fake wealth for a short period of time, but you’ll pay for it later, and you’ll end up paying more.

6. Save up for purchases instead of putting them on credit:

People often use credit cards for large purchases they can’t afford to pay for outright, like a new television. Instead of paying for these purchases on credit, put aside some money each month until you’ve saved up enough to buy it outright. If you can’t afford to save up for the purchase, then you can’t afford to buy it.

7. Get an emergency fund:

Having savings that’s dedicated to emergencies will keep you from resorting to credit cards whenever you have a financial emergency. An emergency fund of three to six months of living expenses is ideal, but starting out with N 10,000 to N 20,000 will help with some of the minor emergencies from time to time.
Once you follow these simple steps, you are one step ahead in the journey to more wealth and financial freedom.



About The Writer

Benedicta Omoruyi is a professional security and investment officer (CIS), marketer and technical evangelist for InfoWARE Limited. She is a fierce writer, content creator, investment enthusiast and advocate, and an all round creative female. She writes weekly for Glazia on the column, Money Talk. 

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