1 Set a budget.

For most people, the word "budget" can be just as daunting as having no money left in their account at the end of the month. But to avoid the money drought before pay-day, budgeting is the only way to keep your finances on track. To make this process a little less intimidating, you need to be savvy about your budget. Give yourself a budget for the necessities as well as luxuries within your limit. Once you have set yourself a comfortable weekly or monthly budget, write it down so that you don't forget that you have a limit to your finances. Remember as you create your budget that the main goal needs to be to spend less than you earn.

2 Track your spending.

Once you have set a budget, you need to track your spending. You can use a simple pen and paper or more structured methods like an excel spreadsheet or finance tool. If you are new to budgeting, a good idea might be to keep all your slips and note expenses as and when you spend. This way you can track your budget accurately and closely.

3 Learn the difference between what you want and what you need.

There are certain things that you need to survive like water, food and shelter. These are basic needs and should always be the top of your priorities. But where do you draw the line between basic needs and wants? Just because you need food doesn't mean you have to dine out every night at expensive restaurants. Before you buy anything, whether big or small, ask yourself if you really need it or if you can work towards buying it when you've saved a bit of money.

4 Save, save, save!

After you've paid off all your expenses and budgeting according to your needs, try and put away some money into a savings account every month. This is perhaps one of the most important tips when it comes to living within your means. Having a savings account provides a cushion that will break your fall when you need it most.

5 Set a goal.

Having a goal both motivates you to save and encourages you to live frugally. Set a goal and start working towards it in all aspects of your expenses. You will be surprised at how much money you can save by saying no to something as simple as an extra cup of coffee.