CC Photo by danielmoyle

Living beyond your means? Join the party! But be prepared for the hangover that is coming.

We almost always think of “living beyond our means” as relevant only to our financial life. But let’s think about this a little more deeply. First of all, what are our means? This is simply another way of talking about our assets or resources. Money is just one of the many resources we rely on daily. We need more than our financial assets in order to get us through the day. Time, energy, skills, information and relationships are just some of the other core assets we require.

So what does it look like to live within our means broadly? We’ll start with the obvious one.


According to economist Paul Kasriel, Americans are living well beyond their means.  Prior to the recent unprecedented string of deficits in six of the last seven years, Kasriel says there have been only seven other years American households have been so upside-down in their finances since 1929.
CC Photo by stevendepolo

That leads to an obvious question: If they can’t afford it, how are people continuing to spend as if all is well? The answer? They are borrowing against their homes, selling stocks, and running up credit card debt.

If you are living within your means you should be able to pay for all of your expenses each month. This would include the obvious: mortgage or rent, food, health care, insurance, car, education, clothing, entertainment, etc.  Each month you (or your benefit package) are putting money into your savings or retirement fund. You should be able to pay off all your credit cards every month and maintain a zero balance. You should also have savings to cover several months of expenses in case of an emergency.

Signs of living within your financial means include:

  • Your income is larger than expenses.
  • Your savings can cover emergencies.
  • You pay off your credit cards monthly.
  • You are adequately preparing for retirement.


Time is one of the trickiest assets we have. No matter what we do we are limited to 24 hours a day, 7 days a week. There is nothing we can do to increase the amount of time allotted to us. Can’t buy it, can’t make it. As a result we do a lot of juggling of our time. We cheat by robbing one area of our life in order to have more time for another. We  “multitask” in order to fit double the amount of life into half the amount of time. How many times have you driven down the freeway while eating your lunch and participating in a conference call? Photo thanks to graymalkn via CC

Evidence is rapidly accumulating that we are not as smart as we think we are when we try to cheat time. There are measurable declines in our memory, concentration, and problem-solving ability when we multitask. Our health is impacted severely by our failure to exercise or sleep 8 hours a night.  Our families have to cope with our absence when we steal time from them for work.

Here are some indicators that you are living within your means when it comes to time:

  • A full night’s sleep (7-8 hrs) is your norm.
  • You enjoy one day every week with NO work.
  • You take real annual vacations – for at least 10 days.
  • Family dinners & exercise are routine for you.
  • Weekends are spent with family and friends.
  • We take real lunch & work breaks.
  • We give undivided attention to the task before us.


Are you regularly drinking energy drinks, coffee or other caffeine stimulants? Are you often tired long before bedtime? Do you sedate yourself in the evenings with wine? How many wine bottles and caffeine drink containers are in your blue bin each week? Do you become a couch potato at home? Perhaps these are signs that you are not living within your means when it comes to energy. There are some natural variations in how much energy we each have. Age, gender, self-care, and personality all affect our energy levels. Because of these individual differences, we shouldn’t compare ourselves to others when it comes to energy.Photo thanks to alubavin via CC

Each of us needs to have self-awareness about our energy level in order to steward it well. Think of a simple formula to describe living within your means:

    Energy input = energy output.

On the input side are diet, relaxation, sleep, and creative engagement.

On the output side are our physical and mental activities. When we overextend ourselves, we experience a range of negative emotions including irritability, dullness, intrusion of negative thoughts, quick temper, pessimism. Our daily work becomes a burden that weighs us down. We shy away from people. We begin to depend on caffeine to wake us up and alcohol to put us to sleep.

In contrast, when we are living within our energy means, we have the energy we need to be creatively engaged. Our capacity for innovation and problem-solving increases. We feel bright and alive. Our work and personal life are equally delightful.

Signs of living within your energy means include:

  • You maintain a stable mood.
  • You are creatively engaged.
  • You are mentally sharp.
  • You have a sense of humor.
  • You are sociable.
  • You maintain healthy self-care habits.

I’m not going to sugarcoat this. Living within our means is not the cultural norm. We live in a society that glorifies over-extension in time, energy and finances. Our economic engine depends upon it. It is very difficult to begin to live counter-culturally. But it is absolutely essential to our long-term sustainability. We will burn out mentally, physically, and financially if we can’t harness our habits and learn to live within the limitations of our assets. It may have already occurred to you that our time, energy and financial assets are intertwined. Often we are overspending our time and energy in order to try to keep up with our extended financial commitments. Because we can’t really afford our lifestyle, we are overdrawn physically and mentally, resulting in loads of stress. Here is a guarantee: it will catch up to you sooner or later.

What can you do to live more within your means?

  • Discuss this problem with your family and friends. Do they feel the same way? If so, decide on ways you can all support each other as you begin to move toward a lifestyle of living within your means. Do this together as a family and community.
  • Try some limited experiments. For example, live on a modest budget for three months. Work only 40 hours a week for awhile. Replace your afternoon caffeinated beverages with water. Take your self–care seriously for three weeks. It takes that long for your actions to become a habit.
  • Say no to any new commitments and eliminate any others that are not essential.
  • Some families, whether through choice or misfortune, have found a sense of freedom in downsizing. They have sold the homes they can’t afford, limited their purchases to things they need rather than want, dropped the expensive vacations and replaced them with rich personal experiences closer to home. This radical approach is not for everyone, but may in the end be the only way forward.

Begin to look at all your life assets and learn to manage them wisely. Your good future depends on it.

Tagged with:

Comments are closed.