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

To "live within your means" refers to the practice of spending less than or equal to one’s income. This concept emphasizes financial responsibility and ensures that an individual does not incur debt or financial strain by overspending. By living within one's means, a person can prioritize essential expenses, save for future goals, and avoid the pitfalls of financial distress that can arise from living beyond their financial capacity.

This principle is foundational in personal finance, promoting a balanced approach to spending and saving, which can lead to greater financial stability and peace of mind. It nurtures a mindset where spending is aligned with income levels, helping individuals make informed decisions about their financial choices without risking their financial health.