Living Below Your Means - An Introduction

Updated: Aug 23, 2019

The definition of living below your means is basic: spending less money than you make. Super easy sounding, more difficult to actually implement.

Living Within Your Means vs Living Below Your Means

I’m sure you’ve also heard the term “living within your means”. They aren't the same thing, although they sound similar.

If you are living within your means then you are just making ends meet every month or week. So, you are living paycheck to paycheck.

You can typically do the following:

  • Pay your bills

  • Put food on the table

  • Afford the basic necessities

If you are living below your means, you have better financial security. You are not broke at the end of the week waiting for your next payday. You have an emergency fund available if you need it.

You have the ability to save for major purchases instead of using credit to pay for them. Most of all, you typically feel good or at least better about your financial situation.

Keep reading for more...

How to tell if you need to start to living below your means

  • You don’t have an emergency fund in place (even $500 is a good start, the bigger the better)

  • Your mortgage or rent is more than 25% of your income

  • You spend more than 50% of your income on essential living expenses

  • You don’t have any savings for future major purchases that you know you’ll need

Quick Tips To Start Living Below Your Means

Spend less than you bring in

If you spend more then you bring in, you need to reduce essential expenses in addition to reducing your spending. Track your spending by printing out or viewing your credit card or bank statements, or keep your receipts for one month. Then see where you can cut back on spending.

Increase your income

Sounds easier than it may actually be. When you’ve done all you can to reduce spending and still can’t make ends meet, you need to consider increasing your income. This can be through a side hustle, asking for a raise, requesting more hours, etc.

Stop trying to keep up with everyone else

Don't try to impress people or worry about what they think about you. Don’t waste your money on things that you think will make other people happy. Try not to be jealous of what others have. Whether it is people you know, people you don't or things you see on the internet or social media. Keep in mind most people struggle with money. Do what is best for you.

Keep reading more below...

Save for purchases instead of using credit

If you can’t buy things without using credit, then try not to buy them. Instead of using credit, save for the things that you want and need. A great tip that has been mentioned on Be Secure Financially before is to think about something you want before you actually buy it. If you are shopping in a store, put the item back and think about it for a week, or even a month. If you are online shopping place it in your cart and come back a month later to really think about the item and if you want to spend money on it.

Build an emergency fund

Financial emergencies happen all the time. The easiest way to build an emergency fund is by treating it like any other expense that you need to pay every month. Place as much as you feel comfortable each week or month into an account or jar and save it.


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