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If you spent more than you intended on holiday shopping or accidentally splurged while you were on vacation, it may be time to take another look at your budget. When you're overspending on a regular basis, taking time to sit down and focus on living within your means is important to manage your stress and set yourself up for financial success. Here are 10 helpful tips on how to live within your means.

1. Set Your Budget

Setting a budget and sticking to it can help you achieve longer-term financial goals like buying a house or retiring early. Use a spreadsheet to capture your monthly income and a list of required expenses, like your rent or mortgage, utilities, and insurance bills.

2. Track Your Spending

Do you really know where your money goes? Try to track your spending for a month or two. You may be surprised by the amounts spent on smaller, fun purchases. Looking over receipts may give you a better idea about where you can cut back in order to live within your means.

3. Save Before Spending

Set up an automatic savings plan to divert money from your paycheck before you spend it. When saving, your first priority should be building an emergency savings fund to carry you through an unexpected job loss or other financial setback. Next, you should focus on retirement savings and saving for upcoming purchases, like a new car or a home.

4. Pay Down Debt

If you're carrying a credit card balance, but want to cut back on spending, set up a payment plan and pay down your debt to eliminate interest and improve your credit score.

5. Pay with Cash or Debit

Leave the credit cards at home, and only try to buy something when you can afford it using cash or a debit card. If you don't have the current funds to pay for what you want, you'll be forced to wait and think about how much you truly need that new television or those concert tickets. Consider using tools like EasyUp® to automatically put money in your savings every time you use your debit card.

6. Plan Large Purchases to Avoid Impulse Spending

Saving up in small amounts for large purchases helps you avoid impulse spending that can have a long-term detrimental effect on your finances. If you're not sure whether you can afford a vacation, try setting aside a small amount each week in a savings account rather than charging the entire amount or making a large dent in your bank balance.

7. Wait for Sales

To save money on large ticket purchases, try to wait for sales. You can often predict when an item will be discounted — perhaps after a new model comes out or during a certain season of the year. Taking advantage of sales is a great way to buy things you want while still living within your means.

8. Ask for a Lower Price

Sometimes, all you need to do to save money is ask. If you've been a long-term customer who's never made a late payment, you may be entitled to a loyalty discount. You may also be able to find more affordable vacation packages by asking for better rates or upgrades if you're willing to be flexible with your travel plans.

9. Leave Room in Your Budget for Fun

Don't forget to budget for a few of your favorite activities. If you like to go out to eat once a week, include your typical restaurant bill in your budget. This may mean prioritizing some expenses over others, but you can find a way to treat yourself to the things you really want by cutting back in other areas, like your daily coffee run or takeout lunches.

10. Make Sure You Have Enough Income

If you've cut your expenses to the bare minimum, but still have trouble living within your means, it may be time to look at your salary. If you're saving for a larger purchase, consider taking on a part-time job or freelancing.

Now that you have the 10 most helpful tips on how to live within your means, it's time to put them in action. There's no better time to start than now. Don't forget to also consider another option: moving. By moving to somewhere with a lower cost of living, you can accelerate your journey to financial freedom.

Living within your means starts with an understanding of how much you have to spend and what you need to save to achieve your financial goals. Learn more about setting budget goals by scheduling a financial wellness review.

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This information and recommendations contained herein is compiled from sources deemed reliable, but is not represented to be accurate or complete. In providing this information, neither KeyBank nor its affiliates are acting as your agent or is offering any tax, accounting, or legal advice.

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