Living Within Your Means

When you live within your means, you are spending money based on the money you have. At the same time, you are putting aside money as savings to meet your financial goals.

It is so easy to overspend. Products are constantly marketed on television and billboards as well as in magazines and newspapers. It ultimately depends on you to be strong-willed to resist all these forms of temptation. You can do so by understanding what in uences your spending and what your needs and wants are.

What is a “need”?

A “need” is something you must have, that you cannot do without. An example of a need is food. You need to eat to live. Otherwise, you would not survive for long.

Now, what is a “want”?

A “want” is something you would like to have that is not absolutely necessary. Jewellery is a “want” because you do not really have to wear it for survival. In today’s world for example, a mobile phone with basic features is a “must-have” for communicating with other people.

However, one that has Bluetooth music player speaker, high mega-pixel camera and other high-tech attachments is a “nice- to-have” mobile phone.

Knowing the difference between a “need” and a “want” will make a signi cant impact on your spending behavior and ultimately, your nancial future. The decisions that you make with regard to what you need or want will affect your budget and monthly spending.

Spending Wisely

When you want to buy something, ask yourself – “Is this something that I need? Can I afford the money to buy it?” Your personal budget and cash ow will help you answer this question. Check to see if you have previously allocated to spend on this item or have already overspent your cash for that month.

If it is a “want”, consider not buying it or spending less for something similar so that you can put more money into your savings. When you do this, you are spending wisely and living within your means. Making sensible purchasing choices and spending wisely will prevent you from creating nancial dif culties for yourself and others. Handling your personal nances in a responsible manner is easy if you just learn to say “no” to purchases you cannot afford.

Delayed Gratification

Do you remember your childhood days when you wanted an ice- cream and your mother said that you could have it later after you nish your homework? Do you remember asking your father if he could buy you a new bicycle and he said that you could have it later if you did well in your exams? In both situations, your parents were teaching you about delayed grati cation.

Throughout your adult life, there will always be someone who will try to in uence you into spending your money.

If it is not your friend asking you to go out to dinner, it will be the sales promoter at the hypermarket asking you to buy products.

Take the time to think whether it is necessary to spend the money and if it is something you can afford within your budget. Remember, when you say “no” to spending money now (by delaying grati cation), you are one step closer towards achieving your nancial dreams.

In life, there are always alternatives to choose from. Look into different substitutes for your “needs” and “wants”. Change your perception, if necessary. Instead of buying a car, using public transportation might be a good alternative to moving around the city. You will save money and furthermore, contribute positively to the environment.


Most people think having a lot of money is the answer to ending poverty. You may have earned RM100,000 per month but the problem is you could have spent RM101,000. And this would simply mean you have a negative cash ow of RM1,000. Therefore, making more money is not solving the problem but living within your means will help you to plan for a better nancial life.

So the next time, before you decide to spend, ask yourself whether this is “a need” or just another “want” or “desire” to add on to the next month’s bill.