Especially with the recent credit crisis, you’re hearing it more and more: live within your means. What are your means and how do you live within them? What does that phrase even mean?

Living within your means translates to “don’t spend what you can’t afford.” You need to carefully consider how much you’re making and how much you’re spending. Are you familiar with the Weight Watchers style of dieting? Weight Watchers emphasizes that you need to write down everything you eat. Everything. Even that handful of M&Ms you took from the candy bowl while passing. Well, getting control of your spending works much the same way. Take a small notebook and write down every single thing you buy. EVERYTHING. You’ll quickly see how fast that morning latte or eating out adds up. You may think to yourself, “but this mega fountain soda only costs two dollars! Two dollars? That’s nothing.” Well, let’s look at that two dollars. Assuming you buy one every work day, that’s forty dollars a month on soda– something that’s not very healthy to begin with. Do this with all your expenses. How much are you spending on dining out? How much on entertainment? How much on groceries?

Let’s talk about groceries. It can be really difficult to look closely at your grocery expenses. Healthwise, you should be spending much of your money on food expenses: that’s fuel for your family. Your family needs that to survive. Don’t cut on grocery costs by buying cheap junk your body doesn’t need or want. Use your grocery trips to combat dining out. Buy ingredients that you’re excited to cook and you’ll save so much money by not paying someone to cook it for you.

Talk with your family about what you really need to be spending and what you should be spending. When you see that extra money in your account, you’ll be thankful.