What does it mean to live within your means?
Simply put, this means cutting your expenses, so you have money left over at the end of each month. By carefully budgeting your expenses, you should have a significant amount of money left over each month.

But wait: Before you rush out to spend all that extra cash, take some time to think about the future.

Saving for the future
Make sure you have a budget plan, clear financial goals, and a plan for cutting expenses. Then begin setting some money aside for the future. At the very least, you should set aside 10 percent of your monthly gross income for your retirement.

Saving money really pays off. It makes much more sense to save the money to buy things rather than to rent items or buy them on credit. Credit is not free money. You will pay dearly for the option to pay for something over time.

Credit cards can be convenient. They are necessary to rent a hotel room, rent a car, or put a deposit on airline tickets. However, credit cards get millions of people into trouble every day. In theory, they are great. We pay a little money (interest) for the privilege of spreading payments out over months or years. But in reality, we pay a lot of money for that convenience.

The cheapest thing to do is to buy something with cash. If that is not possible (and it often isn’t), try to pay off your balance each month. Remember, a low monthly payment really means big bucks in the end. Additionally, by saving up for a purchase you actually make money in the form of interest.

Stay away from businesses that offer cash advances on your next pay cheque
This is never a good idea. These places let you borrow against your pay cheque, but they charge you a lot of money for the privilege. This is yet another reason to plan your budget carefully.

Getting out of debt
Unfortunately, many people feel buried under a mountain of debt—often borrowing money from one card or account to make payments on another. If you think you’re in over your head, it may be time to contact a credit counsellor.

A reputable credit counsellor can help you consolidate your loans (some may even help you negotiate with credit companies) and develop a plan for getting out of debt. For many, this is the last resort before declaring bankruptcy—something that will stay on your credit record for seven years.

When you consider having a consumer debt counsellor choose wisely, choose a registered service provider.