What does the phrase "living within your means" refer to?

The phrase "living within your means" refers to managing your finances in such a way that your expenditures do not exceed your income. This concept emphasizes the importance of budgeting and ensuring that you are spending less than or equal to what you earn. By adhering to this principle, individuals can avoid debt accumulation and financial stress, leading to a more stable financial situation.

This practice encourages mindful spending and fiscally responsible habits, ensuring that essential expenses, savings, and occasional wants are covered without overextending financially. Ultimately, it fosters a sustainable lifestyle where financial health is maintained, allowing for future planning and unexpected expenses without significant worry.