This document discusses living within your means by distinguishing between "must-haves" and "wants". It defines must-haves as basic living expenses like housing, utilities, food, and legally obligated payments. Wants include discretionary expenses like entertainment, eating out, and optional phone/internet features. It recommends getting must-haves below 50% of take-home pay, controlling wants through delayed purchasing, and prioritizing debt repayment and savings to build financial independence and emergency funds.

1. Living within your Means

2.  This is the money you have after all the
mandatory deductions happen:
--Such as withheld income tax, Social Security
and Medicare taxes, and disability taxes.

3.  "Must-haves" include all the basic expenditures you really need to make
each month: housing, utilities, transportation, food, insurance, child care,
tuition and minimum loan payments. If you can delay a purchase for a
few months with no serious consequences -- for example, clothing or
dining out -- it's not a must-have. If you're contractually obligated to pay
something (a credit card minimum, child support or a cell phone bill), it's
a must-have, at least for now.

4.  If you can delay a purchase for a few months with no serious
consequences -- for example, clothing or dining out -- it's not
a must-have.
 If you're contractually obligated to pay something (a credit
card minimum, child support or a cell phone bill), it's a must-
have, at least for now.

5.  Vacations, gifts, entertainment, clothes, eating out and
other expenses are all "wants."
 Some bills you pay might overlap the two categories. For
example, basic phone service is a must-have.
 But features such as call waiting, texting, data, or unlimited
long distance are wants. Internet access and pay television
are two other expenditures that can feel like must-haves but
usually are wants, unless you're on some kind of long-term
contract.

6.  To achieve financial independence and
minimize the chances of disaster, you need
to get rid of consumer debt (such as credit
cards), save for retirement and build your
emergency fund.
 Any loan payments you make above the
minimum requirement belong in this
category, as do contributions to your
retirement and emergency funds.

7.  Getting your “Must-Haves” down to 50% can be tough. So
really think about choices.
 You must have a place to live – but it doesn’t have to be a
place with a pool!
 You must eat- but you don’t have to eat out all the time.
 What are other ways you can get your “must-have” amounts
lower?

8.  Controlling the “wants” is a little easier.
 Before you make a purchase wait a day.Try to
avoid impulse purchases.

9.  Try to avoid racking up a lot of debt and when
you do have debt DO NOT avoid getting it
paid.
 Once you have your debt paid continue to
“save” that money.
 You never know when you may need an
emergency fund.