Finance Friday – What is Living within your Means?

Happy Friday!!! Thank goodness we have finally made it and the weather here in Buffalo is supposed to be beautiful this weekend.  There is nothing quite like knowing you are on the brink of a great weather weekend to get you pumped up for the day!

But first, I’m bringing back Finance Fridays.  Today’s topic is something that many people probably struggle with and just so happens to be a question you ask yourself quite often when you’re making big decisions (like buying a house??). How do you know if you are living within your means??  And what does that even mean??

You probably know what your parents have done, you know what your friends appear to be doing, but when you cut the crap and get straight to the heart of the issue, could you really define what is within your means?

Unfortunately, I don’t have a magic formula that will give you a straight yes or no answer, but I did find this article on Yahoo that has some great tips:

8 Signs You’re Living Beyond Your Means

I shared on the blog a few days ago that Kris and I are building a house, so obviously this is a time in our lives that we really need to make sure that we are living within our means.  But even between the two of us, we each have slightly different ideas of what that looks like.  Does this mean that one of us is right and one is wrong?  I don’t think living within your means is really a one size fits all, but I do know that it is a balancing act between living in the moment and preparing for the future (retirement, anyone?).

In a world where credit is easily accessible, decisions are made with the click of a button, business/jobs are constantly changing, and social media paints a picture that isn’t always true, it’s hard to know what the right answer is.  But I think these 8 signs are a nice benchmark to make you really take a look at some of the important things to consider when you evaluate whether you are living within your means.

So in conclusion, at the very minimum:

– Don’t make decisions based on keeping up with friends,

– Keep a monthly budget,

– Put money from every paycheck straight into a savings account,

– and have an emergency fund.

If you at least do these things, you’re on the right track.

savings meme

(source)

And on that note, I hope you have a wonderful weekend!

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