What does "living within one’s means" signify?

"Living within one’s means" signifies managing income in such a way that expenditures do not exceed earnings. This principle emphasizes the importance of financial responsibility and stability, where individuals or households ensure that they spend less than or equal to the money they earn. This practice helps to avoid debt accumulation and promotes a healthier financial situation.

This concept is fundamental to personal finance and budgeting, as it encourages individuals to make informed decisions about spending and saving. By adhering to this principle, one can build savings for future needs, handle unexpected expenses, and ultimately achieve greater financial security.