To live a financially responsible life means you are living within your means, which means that you are not spending more money than you make. For many people, it is a lot easier said than done.

Using loans allows you to buy more things than your income will allow. That kind of lifestyle is not sustainable and, at some point, your debt will become too large to pay. When that happens, you will be forced to make some important changes or face financial ruin.

Know how much you make
If you want to live within your means, you must know what your means are. Knowing your annual salary or hourly rate is not enough to help you live within your means.

You need to know the net income that appears on your pay slip. You also need to know how often you get paid. Since most of your bills are paid monthly, you will need to know how much you get paid every month.

Spend less money than you bring in
Once you know how much you make, then you can focus on bringing your spending within your income. If you don’t have one already, use a budget to plan your expenses and use it to keep your spending in track.

If you’ve already tried budgeting and it didn’t work, try it again. Sometimes you just need to make some minor changes to your budget to get it to work.

Stick to it, it is the discipline you require. Unfortunately, discipline isn't easy.

Stop relying on credit
Using loans is not living within your means. When you plan your budget, completely rule out loans as a way to make ends meet.

Loans are unreliable and they carry financial costs that usually people ignore. Only use loans for substantial investments.

Don't copy from friends
Resist the pressure to have the same material things as the people around you. You may be able to use loans to fake wealth for a short period of time, but you will pay for it later, and you’ll end up paying more.

Your friend’s life style is not yours, make your own and be confortable. Life is what you make it!

Save up for purchases instead of acquiring them on credit
People often use loans for purchases they can not afford to pay for outright, like a new television.

Instead of paying for these purchases on credit, put aside some money each month until you have saved up enough to buy it outright. If you can not afford to save up for the purchase, then you can not afford to buy it.

Spending more than you earn
This does not sound logically possible. If for instance you earn Rwf200,000 a month, how could you possibly spend Rwf280, 000 in a month?

It is easier than you think. Dipping into savings, borrowing from others, and using loans are the primary ways of spending more money than you earn.

You might be able to get away with doing this for a few weeks or months, but soon, your hole-digging spending habits will catch up with you. Before you know it, your savings is depleted, and you cannot borrow any more.

Spending money you do not have
Usually, spending more money than you make is enabled by spending money you don't have. You spend money you don't have by purchasing on credits and taking out bank loans.

When you use these instruments to pay bills and make purchases, you're creating debt. If you can't repay the debt each month, it will continue to grow.

Using credit when you have cash
One of the quickest ways to get into debt is to choose to use credit when you have the cash to make a purchase. People do this with a "something for nothing" type of mindset.

They want to receive the goods (or services) but they don't want to pay for them. The convenience of leaving your money in your wallet comes at a cost.

Chances are; if you don't want to pay for it today, you're not going to want to pay for it tomorrow.

When you are establishing financial goals, don't use words or phrases like "try,” "would like to,” or "might.” State your goals as strongly as you can: "I will pay off my loan by September next year;” instead of "I'll try to pay off my credit cards”.

The primary difference is in the attitude you take about your ability to control your finances.

sebasore@yahoo.com