Sometimes it is difficult to know just what it means to live within our means, but no matter how mean it sounds, we need to learn how to do it.

"Means" means the available resources that we have, especially money. So how do we live within our money? It is really quite simple. We spend less than we make! That is the secret, and always has been. No matter how much money you make, spend less.

There are three easy questions to ask yourself that will help you to know if you are indeed living within your means.

First

- Do you owe anyone money? This does not include long-term debt like the total price of your home or car (however, it is entirely possible to purchase a home or car that is well outside of your means, so be careful).

Second

- Are you current on all of your monthly bills? If so, can you continue to be current on them for the next six months?

Third

- Does your debt increase or decrease each month? If you have debt, is it being paid off without incurring further debt? Can you pay all of your bills and still have some money left at the end of the month? If so, you are living within your means.

That being said, if you do have debt from credit cards or home equity loans, you must ask yourself why you have that debt. If it's a result of a one-time purchase, and your plan is to pay it off as soon as possible, then that shouldn't be a problem. If on the other hand, you find that you have refinanced your home several times to free up money for other things, then you might be in trouble.

It usually is not a good idea to use debt to pay debt. It's like having a hole in your yard that you need to fill, and digging another hole in the yard to get the dirt to fill it. The problem is that you find out that to fill each hole you need a little more dirt and before long, you have a huge hole and no more dirt to put in it.

The only ways to get out of debt are to either increase your income or decrease your expenses. There are several ways to do either one. If you are overspending just a little bit, it will probably be easier to simply analyze some of your cost and cut them down. For example, you could cook food at home rather than go out as often, or you could switch to public transportation to save money on gasoline.

If you find that you are spending quite a bit more than you are taking in, you will need to make some major changes. A different, higher paying job or a second job might be the solution to your problem. You could combine efforts and cut expenses while taking on new part-time employment. These are hard decisions and you will need to weigh them carefully. Regardless of how you got into the situation, if you are spending more than what you are making, you must do something to correct it immediately or you could end up with a hole that you'll never be able to fill.

I'm sorry if it sounds mean, but live within your means.