Why And How You Should Live Within Your Means To Resolve Your Debt

A lot of people are oblivious about living a debt-free life. A great number of young adults nowadays can identify with this. They strike out their way by applying to student loans so they can provide funds for their college education. Moreover, a considerable number of people will turn to advantage of using credit card to provide for their everyday expenses, thus resulting to a credit card debt. But luckily, there are lots of excellent approach to make paying off debt less agonizing.

In today’s post written by our guest blogger Good Nelly, she’ll walk you through the following steps of debt relief and explain how living within your means can resolve your battle of debt. Now if you’re all set for a debt-free life, you might want to read until the end!

Why and How You Should Live Within Your Means to Resolve Your Debt

By: Good Nelly @ MyWayofViewing.com

Financial advisors very often tell us to stay within our means as the first rule to get rid of debts.

But, what exactly does this mean?

CNN Money defines this as, “spending less than you earn, saving some of your income and having no debt. The exception being debt that lets you build net worth, such as buying a home, getting a degree or making a home improvement that builds equity.”

It’s not possible for everyone to understand this. So, we are here to give you an explicit concept about the same.

This could be an informative and savior article for the peeps, who are already trapped in debt and looking for debt relief options.

How to resolve your debt

Before we proceed, you should know the following ways of debt relief:

Debt consolidation

It will help you to resolve your debts in the form of single monthly payments. By the way, the consolidation comes with reduced rates of interests.

Debt settlement

This can benefit you if the outstanding balance of your credit card seems unbearable to you and you want a reduction of this amount. Debt settlement will make this happen to help you out.


The ultimate step a debt ridden person can take is bankruptcy. You can file bankruptcy through an attorney when you have lost all other possibilities of debt relief.

Anyways, enough of these theoretical concepts! Let me take you to some practical scenarios to relate things better.

But before we go into that discussion, tell me, what is the primary thing to resolve your debt? You need to save more and use that amount to repay debts.

So, precisely, you need to live within your means and save as much as you can.

Are you living out of your limits?

Basically, when you are taking out loans to afford your lifestyle, then you are living out of your limits. And it gives you indications as well, like:

  1. No matter what, you are relying on credit every month.
  2. You are living “paycheck to paycheck”, as all your earnings go for paying your  current credit card bills and meeting your necessities. As a result, you don’t have substantial liquid assets.
  3. Perhaps you can’t even make the minimum payments on your credit cards.

A person who had been debt trapped earlier, knows the true essence of debt relief. And that’s why we are advising you to stay within your limits.

In this way, you are getting benefited in ample ways:

You start saving more

Getting adapted to the frugality, you start saving rather than relying on credits. You can save for your long-planned vacation and your retirement too. Isn’t it great?

You gain confidence

Yes of course! When you are well aware of your financial management, you become confident about your financial status.

You don’t need to be stressed

According to a survey by the American Psychological Association, 72% of our country’s population feel stressed about their financial status. So, after paying back debts, you can experience a stress-free peaceful life, and have a good sleep at night.

Living Within Your Means

Now, the questions which might arise in your mind are how to live within your means?

That’s normal and you will get to know once you go through the following points:

All you need is a budget!

Chalking out a proper budget will make you thrifty.

So, review your take-home salary and the credit card bills and note down the deficit for each and every month.

Now, you have to spend less than what you are actually bringing in to your home.

When traditional budgeting is not working for you, then try “backward budgeting”.

Let me show, how this works!

Take a pen and paper and write down your income.

Now, start subtracting each and every expense from the same. If you get a negative number, then it reveals that you are spending too much.  

Don’t believe in misconceptions

Debt free and zero debt might sound similar to you, but actually they are not! There has been confusion in people’s mind regarding it.

If you are following your budget properly and paying credit card bills on time, then you don’t need to worry.

Set up an emergency fund

Well, this is the wisest thing you can do in your financial management. We can’t predict our future and we have got certain responsibilities at our home.

You should save an amount every month, which can be used as an emergency fund; So that you don’t have to opt for loans if such a situation arises.

Always try to pay in cash

Whenever you are going to any kind of shopping, you should avoid paying by credit cards. Paying by cash can save you from falling into the debt trap.

Differentiate between your needs and wants

If you are prone to credits, then you might be focusing more on your wants than your needs.

But when it comes to frugality, you should focus more on your needs, than your wants.

Be a penny pincher

Before you go shopping, make a list of the things which you really need.  You may go to the relatively cheaper supermarkets like Walmart, Costco, etc.

Always look for discounts and promotional codes. There are websites like Dealnews, Savings.com, RetailMeNot, etc. which can help you in finding the best deals.

However, keeping all the above points in view, we can say that the sole concept behind living within your means  is “don’t spend more than what you earn.”

About Good Nelly

Good Nelly is a senior member of the DebtConsolidationCare Community from 2007 until today. She’s the proud owner of mywayofviewing.com and wrote articles for other websites like Brightcents and Findependencehub.

Visit her site to learn more: My Way of Viewing

Don’t forget to follow her on Facebook and Twitter!

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