What does it mean to "live within your means"?

"Living within your means" refers to the practice of managing your finances in such a way that your spending does not exceed your income. This principle emphasizes the importance of budgeting and financial discipline, ensuring that you only spend what you earn or less. By adhering to this practice, individuals can avoid debt accumulation and maintain financial stability.

When you spend less than or equal to your income, you create a buffer for unexpected expenses, save for future goals, and reduce financial stress. This approach also allows for responsible financial planning, enabling a person to allocate funds for necessary expenses, savings, and even discretionary spending without the risk of overspending or relying on credit.