How to Live Within Your Means – A Guide for Your Children

I remember entering the work force after graduating college. I’d survived the relative poverty of a college student, and I was ready to make my mark in the world. As one of the fortunate to receive a job offer just prior to graduation, I thought I was financially set.

Armed with new credit cards and a desire to have all that I deserved, I quickly rented a large apartment and purchased a shiny new car. Next on the list was a professional wardrobe. I was determined to have the best. Well, at least better clothes than my peers. My parents probably wondered at my extravagant tastes, but they kept their thoughts to themselves.

Five years later I was buried under a mountain of debt when cut backs caused my employer to dispense with my services.

Imagine my shock! I thought they needed me. Still, my youth brought confidence that I could weather the financial storm. Of course, my non-existent savings and maxed out credit cards said otherwise. being broke and in debt is no fun. People must learn to live within their means

I was in serious trouble all because I never learned to live within my means.

Are your children setting themselves up for the same difficulty? Rather than look by and worry, it’s time for you to take action. Use this guide and share with your children the concept of living within your means.

Housing – A Creative Opportunity

The temptation is strong, after crowded university housing, to rent an expensive apartment in a nice neighborhood. I understand the temptation and was unwilling to resist. Caution your children to make better choices and think creatively about their housing needs.

A young professional has a lot of options for affordable housing. Your children have friends from the university who just graduated themselves and are starting their first position. This is an ideal time, as single professionals, to share an apartment or condo with a friend. By sharing the cost of housing your child can safely purchase a better situation than they could on their own. Roommates also offer companionship that might be lacking if you go it alone.

Another option is purchasing a small home at a discount. The current economic situation has left a number of properties on the market under foreclosure. They may require some updating or repair, but for an industrious professional person this is also an investment opportunity. There’s security in building equity by the sweat of your brow.

Do You Really Need a Car?

Ask your child to evaluate his needs before purchasing a car. In most urban areas public transportation is excellent and close to most locations. There’s no shame in riding the bus or the train. In fact, it’s better for the environment. This low cost option is readily available and eliminates the need for not only a car payment but car insurance, fees, and maintenance.

If your child already owns a car, encourage them to make do with it for a few years. While that old vehicle he drove in college is not appealing, it is inexpensive compared to the payment on a new one. As long as the car is in good repair, suggest your child use it until he establishes his career. Buying a new car will certainly over extend his budget, risking his financial future.

Pay Cash for Most Purchases

It’s very easy to charge purchases and make a promise in your head to pay off the credit card when you receive the bill. Good intentions are wonderful, but they are just that. Intentions don’t help when there’s not enough money left at the end of the month to settle the debt. Suddenly that purchase just increased by the interest factor on the card.

Living within your means involves spending less than what you earn.

The only sure way to do this is to pay cash for most purchases. Credit is acceptable in limited scenarios, although I currently survive nicely without it. Educational debt and large purchases such as a home are generally worthwhile applications of credit. Getting your nails done or going to the pub is not.

In some cases, it may already be too late for your child. Perhaps they accumulated credit card debt while they were attending college. It’s common for credit card companies to “reward” students with lines of credit. Foolishness, if you ask me, since most students are only marginally employed. If your child fell into the credit trap, go to and look for information on how they can quickly pay off that debt and achieve financial freedom.

Teaching your children to live within their means is one of the most valuable gifts you can give them.

Unfortunately, many of us struggle in that area as well. Perhaps you can speak to your child openly about your own struggles and challenges and partner with them in a renewed effort to live frugally as a family.

Anne Hunter hopes your child will never have to ask “what is a debt agreement” but instead will experience financial freedom at an early age. She, unfortunately, struggled early on and then spent years recovering financially and paying her way out of a debt trap. Ms. Hunter is now debt free and passionate about sharing her insights with others.


If you don't have integrity, you have nothing. You can't buy it. You can have all the money in the world, but if you are not a moral and ethical person, you really have nothing.
Henry Kravis