How to Live Below Your Means: Tips, Tricks & Strategies

What are your means?

The first thing we need to do to make sure that we live under our means is to know what our means are. How much money are we bringing in, and how much money do we have to spend? So don't just look at the gross number on your taxes and think, that's how much money we made. A lot of that gets taken out for taxes.

What is your net income?

What is left over after your taxes are paid? This gets more complicated if you work for yourself and have a variable income. So knowing that number, what would it mean to spend less than you make?

That is so important and even more important if you are self-employed. So sit down, take the time, figure it out, and figure out what would be a number that would mean that we were always spending less than we make.

Have an emergency fund

We make sure that we have an emergency fund. We need a buffer between where we are and disaster. You are living on the edge if you do not have an emergency fund. That's not living on the edge that I want to be doing.

Unexpected things happen, and I expect that when they come, it's not a disaster; it's just an inconvenience. It doesn't throw our whole money plan out the window.

Save for things instead of paying them off later

If you have a big purchase coming, like you know you'll need a car or a vacation, try to save the money in advance instead of putting it on your credit card and then paying it off later. This saves you interest, stress, sleep, and all the things.

It's the same idea as the emergency fund, but when you can save up to something, you get to enjoy it more when you get there because you are debt-free. You can have all the fun that you would like with that item that you purchased, knowing it is 100% paid for in advance.

Yes, saving things takes a long time, but it takes even longer to pay them off. So save in advance when you can.

Plan for cheap fun

If you do not have any fun in your life, and we're like, we're cutting out everything. If you've decided no fun, you will not want to stick with that plan for very long, which means you're going to quit and not going to get very far. Then you're going to be bummed out.

So don't do that. Plan for fun in advance. The fun doesn't have to be expensive. Fun could be something close, local, and inexpensive.

You might become bitter and stressed; your health might go down the tubes because you didn't have time or room for fun. So plan that fun, whatever it might look like, and see if you can be clever and plan the fun to be less expensive.

Make choices

To live within our means, we ask ourselves, will we choose this, or will we choose that? Take back the power of your money choices. Pick price points for your vacation, your car, whatever it is. There are always multiple tiers of how expensive things are.

There are Kardashian vacations, there are Disney vacations, there are camping vacations, and there are staycations. So choose what kind of vacation you're going to do.

There are so many different kinds of cars. There's the brand new $90,000 car. There's the five-year-old $30,000 car. There's the van from your sister.

For $4,000, choose where you're going to be. You can still have the thing, the vacation, the car, the clothes. Just pick your price points that match what your life and what your means are really like.

Make money again as much as we can

We are asking ourselves, how can we? How can I? How can we afford that? What could we do to work around that? How could we have this experience without paying the full price? What could we do instead? How could we make more money? What would it look like if we did this instead of that?

We are turning money kind of into a game like Monopoly. Not that money isn't important, and we do need to make a certain amount of money to survive and to eat. However, when we can take ourselves and money lightly, we can solve money problems creatively.

When you are making your budget, tweaking your budget, or working on your budget, you are using a tool to up your money game. If you pick up a book to learn about money or how to do a new skill that could make you money or help you get a raise, you are adding a little skill to get farther ahead in the money game.

Magically having more money will not change our money skills

Whatever money skills we are learning now at this income level, we can utilize when our income goes up, or we get more investments, we will use these skills. More money will not fix our problems. More money will not fix our money management problems. If we have more money, we have more money management problems if we can't manage our money right now.

So if your income suddenly jumps, it will not be easier to live within your means if you do not have the practices and the discipline to live within your means now. You'll still have to think about the same things and have the same discipline and plan.

Live below your means

Let us know in the comments what your hacks and strategies are for ensuring you live below your means. It can be done. The more ideas you implement, the better chance for success you have.