8 Strategies to Live Within Your Means to Become Debt Free

Today’s post is contributed by Amy Nickson, a passionate writer on finance. Amy is a professional blogger whom has started her own blog and also works as a contributor for the Oak View Law Group. We are lucky as this is her second time contributing here. Her first piece was a hit and discussed 6 strategies young doctors should follow for financial wellness. Please share your opinions by commenting below. We have no financial relationship. 

8 Strategies you can live within your means to become debt-free

Most of us have a craze for using credit cards. Well, using credit cards is not bad when you pay the balance in full on time.

Most of the people in our nation love their credit cards but they hate paying the bills on time. As a result, they fall into the debt cycle.

According to the Federal Reserve figures, consumers in the U.S. have a total of about $1.0004 trillion credit card debts. The overall household debt has increased by 11% in the past decade. The average household credit card debt is $16,883 and deliberately creating financial pressure on people.

However, another significant reason for the increasing debt load is the rapid growth in medical and lifestyle cost. Due to the rising living cost, the average household owes a total about $137,063 debt including the mortgage.

Though the debt burden is increasing at an alarming rate, this doesn’t mean we will be in debt forever.

Thoughtful spending and following smart financial strategies can help you live a debt free life.

Here are 8 strategies to live within your means to become debt free.

1. Know your financial ability

To live within your means, you need to know your financial ability. You need to decide  the net income that comes from your monthly paycheck. After that, you need to calculate  your expenses including the monthly bills.

Now, list your expenses and subtract the total expenses from your total income. If you get a negative number, then either you need to cut down your expenses or increase your total income. This way, you can decide your financial ability, which means how much you can spend for your livelihood and how much you can save for your financial future.

2. Spend less money than you earn

It is important to spend less than your total income. Thus, you can fit your spending with your income and you don’t need to incur added debt to make ends meet.

What if you always struggle to spend less than what you earn

Most of the people fail to spend less than they earn. Usually, they don’t follow a budget and spend the entire monthly income before the month ends. To overcome this problem, you need to plan  a budget to plan the monthly expenses and to keep the spending on track.

What if the budget doesn’t work

Most of the people claim that their budget never worked and they hate to follow one. They say that budgeting is an overwhelming task for them.

Well, budgeting can be difficult for the beginners, but it’s not as scary as you think. If you have tried once  and was unable to follow it, then try it again.  Sometimes, you need to review your budget and make necessary changes to get it to work better.

3. Stop using credit cards, use cash as much as you can

Simple math is to live a debt-free life; to do so, you have to live within your means. So, you shouldn’t rely on credit cards because using them will not let you live within your means. Avoid using credit cards; use cash instead. A pay-in-cash lifestyle can help you to avoid the debt trap.


When you carry cash, you know how much you can afford. You will only spend the amount that you have. By doing so, you can stick to your budget as well. Also, you can avoid costly interest on your credit cards.

4. Save money to buy big-ticket items instead of putting them on credit

People prefer to buy a big-ticket item using their credit cards that they can’t pay upfront. Often this kind of purchase invites debts as you have to repay credit card balance in full within the billing cycle to avoid interest charges.

Instead of buying a costly item using the credit card, try to save up a certain amount every month until you have saved up enough money to buy the item. Thus, you will be able to buy things without incurring debts.

5. Build an emergency fund

Most of the times, people have to take out a loan or use their credit cards to fund an uncertain emergency. Having some additional fund ready for the unforeseen emergency will help you to avoid debts. Try to keep an emergency fund of 6 months of living expenses to combat emergencies like job loss, accident, car break down, and sudden health issues.

6. Cut down junk expenses

Often people say that they struggle to live within their means. They fail to live within their means because they overspend. They often lose their hard-earned money on junk expenses.

How can you find out your unnecessary expenses? You just need to take a close look at all your expenses. Go through the bills and mark the expenses that are less significant and you can live without them like a gym membership, club membership, salon membership, shopping trips, cable service, online subscriptions, etc.

Cancel the services that you rarely use or ask the service provider to win a better deal. You will be surprised to see how easily you can free up some money that can be used for some important purpose.

7. Increase your income

After cutting down your unnecessary expenses, if your income is not enough to meet the necessary expenditure, then you have to try to boost your income. Work hard to get a good raise at your current job.

You can also earn extra money by doing a part-time job. You can also increase your income by turning a hobby into a source of income.

For example, if you love to write, you can start online blogging to earn money. Also, there are many online jobs available that you can consider to earn extra dollars.

8. Save money consciously

The purpose of living within your means is to save a certain amount into a savings account. When you have good savings, you can secure your financial future. Thus, try to save money whenever you can. For example, if you get a cash gift, try to save the money instead of spending it. Also, try to save at least 15% of your income into a savings account.

Lastly, living “within your means” mantra works great to live a debt-free life, but it can be difficult for the beginners. You may feel demotivated at the initial phase. Thus, it is important not to deprive yourself.

Remember, “living within your means” doesn’t have to be about sacrifice. It is about dealing with finances more meaningfully.

For example, after meeting all the necessary expenses, if you have some extra money, you can spend it the way  you want.  You are not allowed to eat out at restaurants often , but you can dine out 1  or 2 times a month.

Try to pay yourself a certain amount every month. Include it in your budget. For example, set aside at least 5% of your income as your reward. Spend the money on your wishes to feel motivated.

There you have it. Eight great steps, don’t wait to be debt free. What do you think? Is it really possible to use cash in today’s society? How about those side gigs? 

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I am a Dad and Doctor trying to make sure I am living life in the best way possible. Whether it is having my finances together, being a great parent, or balancing my home life with work, I am here to kick a$$ and help you do the same.

15 thoughts on “8 Strategies to Live Within Your Means to Become Debt Free

  • December 8, 2017 at 3:32 am

    Interesting read, wise guide to follow.
    I’m currently debt free and at home. I have the financial and time freedom I craved for many years. Car, bond and all debts paid off. I’m investing and reaping the benefits by getting a weekly income and still building my assets.

    • December 8, 2017 at 6:31 am

      Seems like you have made it to the promised land. Nice work….How is the weekly income coming in? Bonds?

  • November 28, 2017 at 7:43 pm

    Nice, Amy. Very sound advice. When I was living paycheck to paycheck, I was convinced I had an income problem. But looking back now, I realize I didn’t just have an income problem. I had a spending problem (I wasted a small fortune on fast food and booze), an energy problem (I had no stomach for a second job), and an ego problem (a man of my esteem couldn’t be seen in a crappy car). Thankfully, though, I eventually woke up. But how do we get others to do the same? Is the average guy and gal destined to be a debt slave, chained to a tedious job and comforted by occasional tokens of fake wealth? Damn, this personal finance stuff is hard. Thank you for fighting the good fight.

    • November 28, 2017 at 10:24 pm

      Ha…I think you are leading the fight and I am just following. I was the same way…a man on a mission to eat, drink, and date… Actually it was quite fun and I don’t regret it, but I have the benefit of a high paying job. Without that job I would be in a world of trouble now.

  • November 27, 2017 at 3:41 am

    You are on the right way. Many thanks for appreciating my write up 🙂

  • November 26, 2017 at 9:50 pm

    I agree, pay off the debt first then invest. While investing may earn you a healthy return, it is very unlikely to you earning more than you are paying in interested on your debt. It is kind of like to snowball method. Pay off the heavy hitters first then worry about the rest to save the money money.

    • November 26, 2017 at 10:02 pm

      Agreed. That is why I recently paid off my low interest debt…now we will invest! Boom!

    • November 27, 2017 at 3:37 am

      Yes, debt snowball method is one of the best ways to repay debt on your own. And since the debt payoff journey takes time, this method build a sense of confidence in you and you will remain focused toward your goal.

  • November 25, 2017 at 2:29 pm

    Don’t just save, invest. When you invest you become an owner in America. America is a place where people get up every day and go to work. Their work add’s value to some raw material or fulfills a need. That product gets paid for. If you’re an owner over a very long time you share in the profit and your investment compounds and grows. America is a place where law (for the most part) is respected, so you have a reliable field to play on. Your investment will go up and down but as long as people get up and go to work every day it will grow over a long time. So that’s my advice don’t just be a worker be an owner. Debt is troublesome but if you can make more investing than paying debt you get to keep the difference so do both pay debt and invest. The $1 you invest today will grow to $8 in 30years

    • November 25, 2017 at 4:19 pm

      Wise words but I still paid off my student loans with a relative low interest instead of investing. I am not sure if we will have a recession in the next 4 years or if the market will continue to grow, but at least now I know my debt is gone.

      • November 27, 2017 at 10:45 am

        If there is recession it’s time to put MORE into the market not less. The country isn’t going out of business, so buy low.

        I fully agree with paying of high cost loans ASAP, but even then a dollar invested will yield $8, 30 years in the future and the payday loan will be long forgotten. A dollar invested 15 years out will only yield 4 bucks in the future. So by waiting to invest you are loosing future earnings. So if you have $3, put $2 into the loan and $1 into the future.

        Great discussion, frames the problem nicely

        • November 27, 2017 at 10:46 am

          Very true indeed… Mathematically it makes sense but sometimes emotions get the best of us. As long as money is working to move you forward then it is a win in my book.

    • November 27, 2017 at 3:39 am

      Yes, investing is important. The earlier you invest, the earlier you will able able to achieve financial freedom. But, before start investing, you need to be pay off your debts especially the unsecured debts that come with highest interest charges like credit cards debts, payday loan, personal loan etc.

  • November 25, 2017 at 8:57 am

    You sure can’t go wrong following any of these rules. I started saving and investing early. Any investment income went to debt reduction until the debts were gone. Then the investment income piled up and was allocated to new investments. Pretty soon you have a lot of income streams.

    • November 25, 2017 at 4:21 pm

      I just paid off debt and will be more seriously investing. It will be interesting to watch the pile of cash grow.


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