What Does It Mean To "Live Within Your Means"? - A Guide For Aussie Families

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Australian families are hard working, often doing long hours, and in tough jobs.

It's tough to raise kids while working, but millions of Aussies do it, week in and week out.

We also manage to have some fun along the way, whether it's going to the footy, the movies, or just enjoying a picnic out.

But family life means being financially responsible and living within your means.

But what exactly does this term mean?

In this helpful article, we'll share about staying within budget, with a guide for Aussie families. Continue reading to learn more.

Instead of thinking you need to opt for new car finance, you can consider buying a used car. As cars are depreciating assets, a used car will always be cheaper than a new one. Even if it is a newer model with low mileage, you can typically save thousands compared to buying a brand-new model. Part of living within your means is buying what you can afford, and not all families in Australia can afford a brand-new car, much less need one.

A used model that is reliable, affordable and gets you and the kids from A to B could be a great way to live within your means, and most of the time you won't even notice it's not new, as long as you buy from a reputable dealer. Plus, the car's previous owner would have picked up on any issues when the car was first driven, taking out the costs of initial maintenance and repairs.

If you do have your heart set on a brand new car, make it a priority in your finances. Factor a decent chunk of your savings towards it, and set out a payment plan that you know you can afford. Shop around for deals which allowed gradual payment without charging high interest.

When it comes down to it, this is precisely what the saying "live within your means" is all about. Your means is your total combined income, after tax, but also factoring in all your ongoing and once-off expenses.

For instance, we all have housing costs to pay for - whether rent or mortgages. Then, there are groceries to feed the family. Add in insurance, on either the house, cars or both, and contents as well. There are utilities, such as gas, power and internet, and don't forget entertainment expenses, such as cable or streaming services. After all that, remember the kids' education costs, such as school fees, textbooks, stationery and more. You might also have pets, and their food, vet bills and grooming costs come into the equation too.

As you can see, the cost of living can quickly add up. If you spend more than you earn, you'll get into a vicious debt trap that can be hard to avoid. We'll share a few tips about avoiding debt and budgeting below.

Part of living within your means includes setting a budget and sticking to it. There are great, free budgeting tools available on the internet to help even the least money-savvy among us. Pop in your total income, then all your expenses, and the tool will tell you if you have a surplus or a deficit and how much it is.

A surplus means excess funds, which is excellent, as you can put these towards savings for a holiday, a house deposit, or something to enjoy. A deficit means you're spending more than you earn, and you're definitely not living within your means. If this is the case, you'll need to cut out some spending. The next section of this article will address how to ease back on unnecessary purchases.

You might be shocked at how much all your unnecessary spending adds up over the year. If you're looking for an easy way to save money and live within your means, examine your streaming services and retail subscriptions such as Amazon Prime or eBay Plus for a start. For example, if you have three streaming services, like Netflix, Stan and Binge, cut back to one, and you'll save around $40 a month.

Buying lunches at work also adds up if you work full time on site, as it's about $15-20 a pop, so you can easily be spending $100 a week on food alone while at work. You could save heaps of money by packing a lunch to enjoy on your break, which is almost guaranteed to be healthier too.

Other purchases that can quickly add up include takeaway coffees, gaming or app transactions and unnecessary retail purchases. Part of living within your means is about buying what you really need and saving up for those lovely things. For instance, if you have a surplus in your household budget, it can be okay to buy lunch or coffee here or there, as long as you don't do it every day and can continue to save some money at the same time.

This helpful article has shared all about living within your means, and what the term means for Aussie families. It's all about setting a budget, sticking to it, and ensuring you have a surplus. Unfortunately, this can mean cutting back spending on some of your non-essentials, but if you want to get ahead, this is the best and most sustainable approach.

With a stable, secure handle on your finances, you'll feel more comfortable about the luxury purchases when you do treat yourself, from a takeaway coffee to a new flat screen TV.