Living within your means is living with the money you have, not what you can borrow. It can be done, but it requires sacrifices. My family of 6 does okay, even with a single steady wage earner (I am a writer, so my income is sporadic), because we have no debt aside from housing expenses and car insurance. None. If we were to add in a car payment or credit debt, I don't think I'd feel safe at all. We save for what we need, and understand the difference between need and want. That being said, we have computers (5 at last count, though they're not all the newest), TVs, etc--everything anyone else has. The difference is that we own what we have.

I am 52 and a multi-millionaire. I retired six years ago. When I retired I was making about 80k, my wife was making about 100k. Due to child care issues (2 kids), I quit my job to be a stay at home dad. When my wife and I got married in 1996, we had a combined net worth of about 100k, and an 80k mortgage. I know this sounds like one of those sham infomercials, but it is a true story. We simply lived beneath our means. Before our first child was born, we put every penny of my wife's salary into paying off our mortgage. Now we joke about how we only had a few dollars left at the end of each month during our pay down period. We have never had cable TV, nor do we spend on frivolous things like expesive coffee. Most importantly, we are not shoppers! We drive mid range cars until we no longer feel that they are safe. We both maxed out our 401k contributions and after paying off the house, invested at least 20% of our income. We educated ourselves and developed a globally diversified portfolio of stocks and bonds. Our frugal ways have allowed us to go on many wonderful vacations with our kids. We never feel deprived of anything. I think that the secret is that you have to zig when the rest of society wants to zag. Many of our friends and relatives asked us why we lived the way we did. Guys I worked with used to call me cheap. They are still working. We figured out that we did not need a luxury car. We did not care about designer clothes. We don't need smart phones with texting packages. A couple of years ago we moved to a bigger house in a better neighborhood. We now live in a 500k home with a small mortgage that we can pay off at any time. This was all made possible because we both spent 25 years living beneath our means. Perhaps far beneath our means. Yes, you need a decent income to accomplish this, AND, you need the courage to be different. My wife will probable retire in five years when she turns 55 and our kids are finishing up college. We never inherited a penny of our wealth, nor are we expecting to. Becoming wealthy is a choice. It is true, watch the pennies and the dollars take care of themselves!

I own a 160 year old farmhouse on a 15 year mortgage. 6 years to pay off, although I have enough saved to pay it off now, if I need to. Each year I do one project for my house - 2012 I painted it, with my handyman. 2 years ago my brother in law, my stepfather and I ripped out the existing bathroom down to the studs and remodeled it. 2013 my BIL and I will put a new tin roof on. I save money by doing the work along with helpful family members. I have no debt - when I needed a new car this summer I bought used and was able to pay cash for it. I put 20% pre-tax into savings, which is about 40% of what I take home each month. I do without - I buy clothes and books at thrift stores. I bake my own bread. My house doesn't have central heat and air (although that's in the projected improvements after I pay off the house).The car I replaced was 15 years old and had 213,000 miles. I could save a lot more if I didn't have aging pets and a horse that was chronically ill this year. No one is going to take care of me but me - it's important that I be self-sufficient and stand on my own two feet.

I have read several different financial authors/gurus books and websites and put together a plan that I think works for me. I lay out all the bills that have to be paid like rent, car pymt, utilities, etc. Then I decide how much I want to put in savings and the rest is divided between spending money (guilt free) and the extras I want in my life, i.e. cable, housecleaning, etc.

I tore up my credit cards 9 years ago, best thing I ever did. All those things I thought I just had to have that went on a credit card, well, when you're saving up for them, by the time you get the money together, you find you really didn't need it anyway. More stores are doing lay a way now, use that instead of credit cards. Unless you can pay off the bill every month, you are just making banks richer, and that is not my goal in life.