Which action would best illustrate living within your means?

Living within your means refers to managing your finances so that your spending does not exceed your income. This is fundamental for achieving financial stability and preventing debt. The action of creating a budget and sticking to it exemplifies this principle because it involves careful planning and tracking of income and expenses. A budget helps individuals set limits on spending in relation to their earnings, ensuring that they can meet their financial responsibilities without resorting to credit or incurring debt.

In contrast, using credit cards for all expenses can lead to overspending, as it enables individuals to purchase beyond their current income. Borrowing money for unnecessary purchases indicates a lack of financial discipline and can lead to debt accumulation, which is contrary to living within one’s means. While saving all income without spending any might seem like a secure option, it is unrealistic and can hinder one’s ability to meet everyday needs and obligations. Overall, creating and adhering to a budget is the best approach to ensure that expenses are aligned with income, embodying the concept of living within one’s means.