10 Tips to Live Below Your Means

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To live below your means is simply to spend less than you earn. Easy right?

Sadly, it’s not always that simple and to actually live below your means involves serious financial discipline and effort.

Luckily it doesn’t mean having to go without all the things you enjoy, but it may mean making some conscious lifestyle changes to avoid overspending, save money and be more intentional with spending.

Being in control of your money is the best step towards financial security. Money can be the cause of a lot of stress and anxiety, but once you’ve got a handle on it and are working towards your own financial goals it can help you feel more in control and less worried.

Living below your means gives you the ability to save, have money for emergencies and puts you in a much better financial position.

If you’ve tried everything you can think of to try and live below your means but your income is still leaving you short, it might be time to look at trying to add another source of income.

How do you live below your means? Here are a few tips to consider:

1. Create a budget

The first step you need to take when you want to live below your means is complete honesty with how much you have and how you’re spending it. A budget will help you get in control of how much you have for your expenses, savings, and debt repayments if you have them.

When working out your budget you have be realistic and reasonable. A spending diary for a week or two can really help to see exactly where you’re money is going.

A popular method of budgeting is the zero based system which has you allocate every penny, which means you know exactly what all your money is being used for and why. Another option is the 50/30/20 budget rule whereby your budget is allocated to needs, wants, and savings, respectively.

2. Curb your spending

Overspending on unneccesary things is how most of us end up living beyond our means. Cutting out those expenses can really help to save money. Think about what really matters and whether what you’re spending on is really important to you.

Maybe you could cut back on eating out or buying takeaways? Perhaps you’re paying for a gym membership but rarely go or have a TV subscription you don’t really watch. Those could all be cut back to save money for things you care about more.

3. Use cash


Paperless payments are convenient but make it psychologically easier to overspend. Impulse buying is a lot easier when you just have to swipe a card.

Spending hard cash makes your stay disciplined on your spending because you realize how much you are spending. You can physically see how much is missing from your wallet, so you’ll be more intentional with where your money goes.

The cash envelope system is a great way to budget using cash. At the start of each week or month you allocate money into envelopes labelled for each area of spending. The money in your envelope is your budget for the allotted time. It makes it easier to see how much you have left, and stops you going over budget.

4. Get rid of your credit cards

If you find yourself often relying on credit cards, or using them too often to make unecessary purchases it might be time to get rid. If you really want to live below your means then not taking your cards out with you could be a consideration.

If you really do need to use credit cards, try to only use 0% credit ones and always pay the balance on time, before interest payments kick in. Otherwise credit cards can lead into debt and high interest fees that can be tricky to get out of.

5. Negotiate rates

Never assume the first offer you see is the best. In most situations it’s usually possible to find a better price or a cheaper deal. This is particularly true when it comes to ultility services and subscriptions.

It might be as simple as just asking the company you’re with for a discount. Most companies usually don’t tell you that prices are negotiable. It can’t hurt to ask, and there could be huge benefits to doing so like saving a lot of money. Don’t be afraid to ask for a lower price.

You can also use price comparison sites to search and find a better deal. It’s usually super simple once you’ve chosen your deal to easily sign up and let the company perform the switch for you.

In the same when, shop around when you’re making purchases. Check out prices in different shops to see if you can find it cheaper. When you’re shopping online use tools such as browser extension Honey to easily find and apply the best discount codes available.

6. Downsize your home

Investing in a smaller home can be just the thing you need to hone in on your spending. Let’s face it – most of us don’t need a huge mansion of a home. Especially if it means that you’ll find yourself in debt trying to pay off its mortgage fee, taxes, and relatively high utilities.

A smaller home, with fewer bedrooms, fixtures, and utilities, can seriously cut down on spending. It’ll cost less to power and heat. Your dream home should be a space you love, but that doesn’t bust your budget.

7. Buy used

When looking for assets, such as a vehicle or a piece of furniture, you’ll be surprised how cheap you can buy high-quality items for. Oftentimes, people get rid of their stuff even though there’s nothing really wrong with it. Either they want a newer model or maybe it just doesn’t fit their lifestyle.

Therefore, it’s possible to get a bunch of almost-brand new items for much less money. Remember, living below your means sometimes involves making lifestyle changes like this. You don’t need flashy new things if used, older models work just as well. Sometimes, they work even better!

When I was buying my first car, I wanted to make a statement. However, I realized that I would spend quite a lot more on a new car than buying a used one. I ended up buying an older model and I’m still quite happy with it. It’s never broken down on me to this day!

Read more: 5 benefits of buying second hand

8. Make a list before shopping

An impulsive grocery store or mall trip will surely have you spending more than you planned for. Therefore, make a list before you leave your house and decide where you want to go shopping. This will help you cut down on costs because you’ll only be buying what you need.

Write down what you need on a piece of paper, so you can cross it down as you get to those items. There are free mobile apps that you can use to make your shopping lists too! I like to make my list throughout the week, as I run out of important food stocks. In this manner, I never forget anything that I need.

Meal planning is a great way to make sure you only buy what you’ll use and also helps cut down on food waste.

Read more: 15 Easy Frugal Food Hacks

9. Pay off debt

It’s so so easy to get into debt. And the more debt you’re in the easier it is to be drawn further down the debt staircase.

If you’re in struggling with debt and don’t know how to deal with it, don’t be afraid to ask for help. There are plenty of free and confidential debt charities that can help you figure out your options.

Whilst it may seem impossible to get out of debt, even with small steps it’s possible to start. Start by setting out every debt you have, looking at when it’s due, and the amount of interest you’re having to pay. Make sure you’re always paying at least the minimum to avoid extra fees and higher interest payments.

There are different approaches to paying off debt, each with their own merits – you can start by trying to pay off the debt with the highest interest first, so the debt costs less in the long run. Alternatively, the debt snowball approach can help with motivation – you pay off the smallest debt first and then add those repayments to the next biggest debt and so on.

Read more: Simple steps to pay off debt faster >>

Try and avoid using debt to pay for things if possible. If you can, saving up for things in advance is much better for your finances.

10. Adopt a healthy mindset

The human mind is programmed to give out what is fed into it. When you are trying to live below your means, you should have a positive mindset on how you spend your money. For example, look for ways to save, as opposed to ways to spend. Read up on financial literacy.

If you’re an emotional spender, work out getting out of that habit.

Focus on celebrating the small wins, the savings where you can, rather than feeling like you’re missing out. Knowing that you’re on your way to reaching your financial goals can help keep you motivated.

Final thoughts

It might seem difficult at first to make those changes that help to live below your means, but in the long run, life will become easier with healthier finances.

There are so many ways to live more frugally, cut down spending and save money without feeling like you have be cheap or miss out. The more you adopt healthy money habits, the more natural they’ll become.

Check out these other articles to help with saving money and living on less:

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