1. Not spending any more money than you earn. This does mean that you can spend as much money as you do earn, as long as you don't go over.

2. Not spending any more money than you earn, and not having any debt (other than good debt) to go along with it.

3. Spending less than your end up earning. Putting the rest of your money in savings. And getting rid of all of your debt and not getting any new debt.
Basically, everyone agrees that if you are spending more money than you earn, you are not living within your means. However, the Federal Reserve did a Survey of Consumer Finances in 2001, and the survey showed that about 14.5% of Americans consistently spend more money than they make. These people are in pretty big trouble.
26.3% of Americans spend as much as they make. But to them, this is living within their means. If you don't make a lot of money and you can just barely make ends meet, than this might count as living within your means.
The ideal situation when it comes to living within your means is that you
? spend less than you earn
? save some of your paycheck each month
? have no debt, save your "good" debt, like a mortgage and your student loans.
However, you must realize that there are no firm and inflexible monetary amounts when it comes to saving amounts and how much you should be paying towards your good debts. You need to decide on the amounts based on how much risk you are willing to take. It also depends on where you live (for determining your mortgage amounts and the cost of living), your actual income, and your overall financial situation.
Your approach to risk will determine how much debt you are willing to take on. If you are really conservative, then you don't want any debt. Some people are comfortable with having "good" debt like their mortgage. And some people are comfortable with a temporary credit card balance if the interest rate is currently at 0%.
When you are determining how much "good" debt you are willing to take on, there are a few things that you need to take into consideration. Usually, people shouldn't take on a monthly housing payment that is more than 25% of their gross income. But, if the cost of housing is particularly high in your area, if you want to live in a certain area because of the schools and other advantages, or if your home is what you consider to be your most valuable asset, than some people are willing to spend up to 50% of their gross income on their housing.
And how much should you be saving each month? Well, most financial planners recommend that you save at least 15% of your annual gross income per year. But sometimes, when you have other expenses that you can't avoid, you have to save less. It's up to you to decide what expenses are most important for you and where you are willing to spend your money.
If you are having trouble staying within your means, then you might want to consider visiting a certified financial planner who can help you come up with a budget and both short-term and long-term financial plans for you.