Live below your means. Live below your means. Live below your means.
You hear it all the time. You've been hearing it for years when it comes to managing your finances. But what does "live below your means" mean? Put as simply as possible, it just means spend less money than you earn. The concept is not difficult to understand. And yet, many people find it difficult to do. Maybe you're one of those people. I am Joy of Frugal Creative Living and, today, I have 10 practical tips, and some mindset shifts to help you spend less, and feel in control of your money without a ton of effort or feeling deprived.
Tip #1 is to have money automatically taken off the top of your pay.
If you get paid by direct deposit on a regular schedule – even if you deposit a check manually like every other Friday or once per month on the same date, set up an automatic transfer to your savings account for the same day that you know that money is getting deposited every pay period. It's even better if its to a savings account that is completely separate from your checking account so that you don't see it on a regular basis. What's going to happen is, the money getting transferred to your savings, is money you won't see when you get paid. It'll almost be like it doesn't exist because as soon as you get paid, that money is removed. The amount of money that you put aside doesn't have to be large. I've done this with amounts starting at $5.00 each pay when my income was low, up to $50 per pay when I was making more money. It's not about the amount of money, its about establishing good money habits.
Tip #2. Live Like You're Earning Less
Set your budget based on a lower income. If you make $50K, pretend you only make $40K and save the difference. If you do the first step, then, when you budget, budget only for the money that you know will be staying in your checking account. And this money is not money that you are setting aside for any particular purpose, it's not necessarily your emergency fund. It's not because you're saving it up for a trip. Or for the holidays? This is for no reason other than to make sure that you are never spending more than the amount that you're making. This money is just put aside and you're not looking at it. Now, if you decide at some point that you want to tap into it because an emergency comes up, then you can do that, but this is literally just to make sure that you are never spending more than what you make.
Tip #3 is to consider instituting The “One-Year Rule” for Big Purchases
You can also make this a 3-month, 6-month or 9-month rule, depending on the amount of disposable income you have. But, before buying something expensive (like a TV, furniture, or a car upgrade), wait a full year. If you still want it after 12 months, it might actually be worth it to you—but most of the time, the urge fades or you end up coming up with an alternative. Those big purchases can drain your savings really quickly or even put you in debt —especially when they’re unplanned. That’s why the “One-Year Rule” – or 6-month or 9-month – whichever one you set for yourself - is such a great move. It helps you separate those genuine needs from passing wants. You can avoid buyer’s remorse which I have experienced a few times, and it just helps to keep your finances in check.
Tip #4 is to Do a “No-Spend Month”
Pick one month where you spend money on almost nothing. And this isn’t really for the sake of saving money that month – which you will do. But its for the purpose of showing you what you can do without. Cancel any non-essential services for the month – any subscriptions and streaming services – cancel those. Make sure you’re still paying your utilities and your alarm system and your car insurance and things like that keep your home safe and inhabitable. But anything that’s just for convenience and entertainment –challenge yourself to stop those things for a month. And use a No-Spend Challenge tracker like this one to help you plan ahead. Because if you just go into a no-spend challenge without a plan, it makes it more difficult and you'll just revert back to spending that money again. Decide ahead of time what you will not spend your money on, what you must spend your money on, and what you can make instead of buying. See because over here, its not just frugal living, its frugal CREATIVE living. I don’t know if you can relate to this but, When I see something I like at the store, my second thought after, “Oh that's cute" is, “Pppsshh, I can make that.” And sometimes I do! And if I don’t, means I didn’t need it in the first place. We, as human beings, are so adaptable. After 30 days of doing without some things that you’re used to spending money on, you have the ability to develop some new habits that will allow you to leave those old spending habits behind, and make sure you’re spending considerably less than what you’re making.
Tip #5 Turn Hobbies Into Side Hustles
The interesting thing about living below our means is that it doesn’t always mean you have to scale back on your spending. Another way to live below your means, is to increase your means, but keep your spending the same. You can do a variety of different side hustles, but great place to start is with your own hobbies. Monetizing something that you already love doing for free is going to increase the likelihood of the sustainability of that side hustle. If you enjoy crafting, writing, doing household repairs, cleaning – take those things that you love doing in your leisure time and turn it into an income source instead of it just being an expense. Then take whatever money you earn from that side hustle or side job and just put it away in an account you barely ever see or use it strictly for investing. I always say, if you can swing it, don’t even count any of that money in your budget. Some people might feel differently about that. But I say, let that money just be a cushion and take your structured savings out of your regular income – if possible.
Now, Living below your means isn’t just about tactics—it’s also about mindset shifts that make it feel empowering instead of restrictive. Here are two key mindset tips:
Tip #6 is to Detach your Self-Worth from your Spending
So many people spend money to impress other people. Sometimes people spend money so that they’re not viewed negatively by other people, or they want to feel successful or like they’re in charge or just to feel needed. And sometimes, people don’t even realize that they’re being motivated to spend by these external factors. That’s why pausing or setting those timeframe rules – where you have to wait a set amount of time before you make a purchase – is so important. It gives you the chance to ask yourself “Why do you want to buy or pay for this thing?” And actually answer the question. If your response has anything at all to do with how someone else will see you or think of you, then your self-worth might be a little too tied into your spending and you should probably walk away or give that decision a little more time. Real confidence and self-esteem is going to come more from having financial control and discipline and the time freedom that that allows, not the stuff you have or the fake persona you try to present to other people.
Tip #7. Adopt a “Gratitude Over Greed” Perspective
Instead of focusing on what you don’t have, appreciate what you do. There’s a saying that goes “Comparison is the thief of joy”. You could be fine with what you have until you see somebody else with something that might be a little better. Then suddenly what you have doesn’t feel good enough. But if you were content with what you had before you saw the new thing, that means that what you had was all YOU needed. And its free! Cuz you already have it. Be grateful for it. There’s probably someone looking at you wishing they had what you have. When you’re grateful, the desire to constantly upgrade your lifestyle fades, and your current contentment will keep you from those costly comparisons and unnecessary spending.
“Living below your means” is more than just budgeting. It’s about:
- Avoiding debt by not spending money you don’t have.
- Saving and investing to create some financially security.
- Being intentional with spending by focusing more on needs over wants.
- And Resisting that feeling of having to have more stuff when you already have enough.
It doesn’t mean depriving yourself or living cheaply—it means making smart choices so you have the ability to breathe when it comes to your finances.
Living below your means isn’t just about cutting back—it’s about making smart choices that give you financial freedom. The biggest challenges come from mindset, habits, and external pressures, but the good news is, you can overcome them!
