Most of us know that excessive debt is bad. If we’re struggling with debt, or don’t have three to six months living expenses saved in liquid assets that we can use in an emergency, we shouldn’t spend much on anything but necessities.

But where do we draw the line between “necessity” and “comfort.” Purists, of course, will say that we need the bare minimum to live: a roof over our heads and healthy food. For some, a car is a necessity as it provides the means to get to work an earn an income. But if we’re going there — a laptop and smartphone definitely rank as business “necessities” in my household.

When you’re budgeting to get out of debt and create emergency savings, it’s time to take a harsh look at your expenses and determine where you can cut. But it’s virtually impossible to stick to a budget plan where you eliminate everything you enjoy. Like a very strict diet, it’s not a long-term plan for life, and some people may not see an end to their debt for years. Is it practical to give up everything you love for decades?

Additionally, if you subscribe to the belief that we attract what we think about and focus on, as many well-known personal development experts do, living a life of poverty will attract — you guessed it — more poverty.

The question: How do you live well, on a limited budget, to achieve financial freedom and security? How can we capture the feeling of wealth without accumulating more debt and, in fact, living on less. Here are some tips I’ve learned on my own journey to financial freedom:

1. Prioritize

What’s important in your life? Whatever it is, make room for it. When I worked in an editorial firm, I treated myself to Starbucks every day. (Cliche, I know, but true.) With two kids, milk, cake pops and a latte even once a week was starting to add up. I decided what I really liked about Starbucks is the super-strong brew, always fresh. So I invested in a Keurig and, for 50 cents a cup, I can have the same thing at home.

Friends of mine, television fanatics, were able to cancel their cable while they were saving for a house. They rely on Hulu and Netflix and don’t miss a thing.

2. Buy Smart, Not Cheap

I’d always purchased cars that I could buy with no loan, thinking I was “saving money.” But when my 12-year-old Chevy Blazer with more than 100,000 miles broke down, in the rain, on the parkway, while I was seven months pregnant, I decided I wasn’t saving any money driving old cars. Investing in a new car saves me money on gas, repairs, and provides that feeling of security on trips that I’ve never had before.

While a new car is not the right financial choice for everyone, evaluate purchases based on their return-on-investment. Kids outgrow clothes quickly, so you can spend less on their wardrobe. But if you’re not planning to lose or gain weight, better clothes might last longer. The same goes for shoes, home furnishings, and some other items. Shop carefully, and look for products with a warranty, which may cost less in the long run.

3. Save (not just money, but necessities)

One of my financial goals is to achieve a sense of security, the knowledge that in the face of most disasters, my family and I will be okay. Buying in bulk can save money in the short term and create a feeling of “plenty,” — as long as you have a place to store items like toilet paper, paper towels, toiletries, and even food.

4. Have Fun On Less

The entertainment budget is often the first to go when you’re working to get out of debt. But I’ve felt richest during potluck dinners with close friends, where we can buy and cook better food than most of us could afford in restaurants. My best times last summer were at a local (free) beach and sprinkler park with my children, proving you don’t have to spend a lot to have fun.

5. Treasure What You Have

The more I look for the fun and beauty in everything I do have, the less I feel a need to spend money on frivolous items or shop for fun. Simply being mindful of the moment, appreciating the taste of a fresh, home-brewed cup of coffee or your child’s laughter, does amazing things when it comes to curbing the urge to spend.

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