How To Live Below Your Means Without Going Insane: A Complete Guide

John Boitnott
February 26, 2019

When people talk about a “frugal life,” an “austerity plan,” or how to “live below your means,” it tends to evoke images of deprivation. These images are furthered by the common trope of creative people, such as writers and painters, as starving artists, barely able to eke out a living.

When you are working hard, the last thing you want to feel is deprived or financially constrained. You want to enjoy the fruits of your labor, without guilt or shame. To ensure you make the most of what you earn without being reckless with it, here are three strategies that give you more freedom to get what you want while maintaining fiscal security.

Never select the most expensive option

There’s an old adage about products and services that “you get what you pay for.” In many cases, this is true. No one wants to select the cheapest brain surgeon, for example. Often, the least expensive option means a lack of quality. The item wears out more quickly and you have to buy a replacement sooner than anticipated.

However, you don’t have to blow the budget by selecting the most expensive option, either. For example, you can still buy a home, vehicle, clothing or other items, if you’re careful not to buy more than you need. Items don’t necessarily have to carry the highest ticket price to be the best choice for you. You can still enjoy watching movies and sports without the top-of-the-line premium packages.

When you compare prices and features, you may realize that a lower priced item or a different brand provides the same or greater value as the most expensive option. Alternatively, focusing on sales and promotions may allow you to take advantage of a higher priced option without breaking the budget.

Focus on what you actually need versus your ability to impress your friends with your expensive choice.

Focus on what you actually need versus your ability to impress your friends with your expensive choice. After all, those friends aren’t paying the bill–you are.

Cover your critical bills first

Another way to live below your means is to prioritize what get’s paid first. Without question, certain bills like your mortgage, rent, utilities and vehicle payments must be paid first. Not doing so could lead to the loss of those assets and services that are critical to your work and life.

Once you’ve covered the necessities, then you can see whether other purchases are possible, given the funds left over. It’s all too easy to buy on credit or make an impulse purchase if you’re not mindful about where you are with your budget.

The better approach is to not shop on emotion and avoid going to stores or surfing online retail sites just for something to do.

The better approach is to not shop on emotion and avoid going to stores or surfing online retail sites just for something to do. Instead, use that time to update your monthly budget and identify ways to make or save more money. When you put the money away in an account, it’s easier to resist the compulsion to buy something you don’t really need.  

Rethink what’s really important to you

Money is often positioned as the key to success, and the act of spending it can show others and yourself that you’ve made it. Sure, you could purchase an expensive cup of coffee every day or sign up for a pricey Mexican cruise getaway. But is this really what’s important to you?

When you realize that spending money usually doesn’t create happiness but rather puts more pressure on you, you’re ready to reevaluate your spending habits and rethink your priorities.

When you realize that spending money usually doesn’t create happiness but rather puts more pressure on you, you’re ready to reevaluate your spending habits and rethink your priorities. You might find that other things are more important than money and don’t come with a price tag.

Perhaps you truly value a few hours at the beach or park with family members or making a meal together at home with your significant other. Those experiences often provide far greater psychological happiness, without the exorbitant price tag. Choosing these experiences over expensive purchases helps you live below your means and generates greater joy in your life.

To strengthen your commitment to this strategy, plan ahead on any purchases outside your normal monthly expenditures. Make sure you have a strong and valid justification for the expense and research the purchase thoroughly to ensure you get the best deal. At the same time, plan activities and events with your favorite people that involve little to no money. Bake cookies from scratch with your kids instead of buying them in the store. Take a bike ride or hike outdoors instead of paying for that gym you aren’t using anyway.

Practice mindful spending as a rule

These strategies lay the groundwork for a thought process that engages a critical analysis of your purchasing decisions. You can tie your spending to the things you truly value, which in turn means you can better enjoy those purchases that make fiscal sense. Moreover, when you do indulge in an occasional treat for yourself or anyone else, you won’t feel guilty. Your budget can handle it because, for the most part, you live below your means.

John Boitnott has been writing for TV, print, radio and internet companies for 25 years. He’s written for BusinessInsider, Fortune, NBC, Fast Company, Inc., Entrepreneur and Venturebeat, among others.

Feature Image Graphic Design: Anissa Rodriguez For The Money Manual