Living within one’s means is more than just balancing a budget. It is basically being aware of the difference between what you need and what you want.

Financial experts explain that if one wants to live within one’s means, they have to know what those means are. But simply knowing your annual salary or hourly rate isn’t enough to help you live below your means. You need to know the net income that appears on your pay checks—the amount you actually have to spend.

One also needs to know how often they get paid so that they can better match the timing of their income with their bills.

According to Aimable Nkuranga, a personal finance coach in Kigali, living beyond one’s means is reality to many people, and this attracts troubles. 

He notes that some people say that they are paid on time, but they can’t tell where their money disappears to.

However, reasons that push people to live beyond their means vary from one person to the other. Below are some of them;

The financial coach explains that comparing one’s life with other peoples’ lives normally brings up competition, and it stretches your income beyond your capacity, pretending to be in a better financial position than you are actually in. 

Nkuranga says that there is also failure to adjust the lifestyle immediately after a change in one’s income. 

He says offers some tips that could help you live within your means. For example, know exactly how much you earn. Take notice of the net main income and other additional incomes.

Make a budget and stick to it. While trying to fix the gap between your income and your expenses, don’t focus only on reducing the expenses, but also think about strategies and opportunities to increase your income, he says.

Nkuranga says to make it a rule to always buy with cash and never on credit. This will put you on a discipline to only use the money you have. 

He notes that with this rule, when you run out of cash, you stop buying whatever you wanted to buy and didn’t really need. 

The personal finance coach urges everyone to own their lives and stop comparing themselves to others. It is okay to be different, and it is okay to appear ‘simple’ compared to others.

"If you are planning an important purchase, think about saving for it, instead of buying it on credit,” he says.

Nkuranga recommends learning to differentiate needs from wants. If these are mixed, you will not be able to prioritise your spending and you will always run out of money. After knowing the difference between needs and wants, priority should be given to needs.

He also points out that you need to start constituting your own emergency fund. This should be somewhere between three to six times your monthly living expenses. It will take you time to be able to constitute one if you don’t have any now, but you need to start contributing to this. Remember, you save first and spend what is left after saving, not the other way round.