Here are five strategies that will help you live below your means and not be miserable while doing so.
5 Strategies to Live Below Your Means
Okay, so you have your budget at hand now. It’s time for us to look at five strategies you’ll be implementing to not just live below your means but live well at the same time.
1 – Don’t Drop What You Love
You already know about my deep belief that you shouldn’t drop what you love from the first post in this series.
Let me be frank with you for a moment though. You may have to drop what you love or severely minimise it for a period of time if you are in way over your head. It’s the fastest way to live below your means.
Trust me, it will make it so much better when you find yourself in a good place living below your means. You’ll able to reincorporate your loves again, this time in a way that doesn’t result in sleepless nights.
We can’t go too long on a budget with no room for the things we love. If we do, we lose steam at some point. The crash that follows is often much more expensive than doing some planned spending along the way.
I would suggest no more than three months of an insanely tight budget. That’s manageable if you really need to buckle down and work aggressively on getting to a better financial place. That means nothing besides shelter, food and transportation. You might be able to do it for longer – you could if you had to – but don’t plan on it.
Once you are in a more financially stable situation, it’s important to make room for the things you love in your budget. You get to tell your money where to go and it doesn’t matter if anyone else thinks it’s a waste of money.
Personal Spending Money
If you share your finances with another person, you may find that the two of you don’t love the same things. In this case, I would advocate respect for each other and maybe even some counselling if you can’t see eye to eye at all.
You can deal with minor things by having His and Her cash envelopes. Give each of you an agreed-upon amount of money for ‘personal spending’. Both of you need to know where every dime in the budget went, except for in this category.
You can spend your ‘personal money’ on whatever you want! You don’t have to share with your partner what you spent it on, as long as it’s not something that could damage your relationship.
2 – Consider Cheaper Alternatives
A key strategy for living on less than you make is to always consider cheaper alternatives.
Borrow or Barter
The best option when you want to live below your means is, of course, to get whatever you need for free. Ask yourself if you can borrow or barter your way.
Bartering isn’t technically free since what you barter with has value. However, as no money exchanges hands and we’re seldom concerned with a dollar for dollar value in a barter exchange, we’ll consider it free. (I have to add, you should check with your local tax code if bartering is a taxable event)
It’s possible to borrow or barter for anything. From a vacation or help to build something to a simple notebook. Nothing is too small, nothing too big. Children’s clothes, tools you seldom use and books are prime examples of items you can borrow and return once you’re done with them. When we had our first child we saved so much money by borrowing things from friends and family.
It may take some time to establish a borrowing and barter network. Especially if it’s something that just isn’t part of your current culture with friends, family and neighbours.
Be a Firstmover
If you are trying to establish this culture from scratch, the best way to do it is to offer things to others first.
Say your neighbour has a child one year younger than your youngest. Offer to give them your clothes as your child outgrows them.
A friend mentions they’d like to read a certain book that’s currently collecting dust on your bookshelf. Offer to lend it to them.
Soon, these people will begin to think of you when they have something you could use.
You can also ask. “I really need to trim back my hedge but my hedge trimmer broke during the move. Any chance I could borrow yours for an afternoon next week?”
The worst thing that can happen is that someone says no. In that case, you make a mental (or maybe even physical) note not to offer or ask for anything from the person again, at least for a while.
More likely than not, you’ll find almost everyone more than willing to help you out because they see the value it adds to their own lives as well. It’s a wonderful way to build community.
Shop Around and Shop Second-hand
There will be things you can’t get for free. When that’s the case, I encourage you to shop around. See if you can hold out for a sale or if one store carries the same or a similar item for less.
Look online to see if anyone is getting rid of the item and selling it cheaply. Beware of stolen goods and use your common sense in general when shopping online.
If you have more time to find the right item, try to find it at second-hand stores. Just don’t get sucked in with all the ‘great deals’ you find there. It’s only a great deal if it is in your budget and you need it.
Some clarification is needed here. By non-important things, I mean the things that are not important to YOU.
It’s important for me to drink organic tea, so I spend good money on that. That might not be important for you, so you would aim to get the cheapest tea you still found pleasant to drink.
The list you made when defining your why for living below your means will come in handy here.
Look around in your home. Is toilet paper important to you or could you get the cheapest kind? How about ketchup? Does it matter what kind of notebook you write in? Do you even need to buy more ____?
There are no right or wrong answers. You may even discover that something you thought wasn’t important turned out to be important to you. The only way to make progress here is trial and error. That way you’ll find your comfort level for spending on non-important but still needed things.
There’s no need to buy 8-ply TP if 2-ply takes care of business for you. However, if 1-ply gets your hands all gross and scratches your sensitive bum, don’t go there. It’s worth the extra cost to you.
4 – Don’t Go Shopping Hungry or Without a List
You’ve heard this a billion times. It’s annoying but true. You have to follow this strategy if you want to live below your means.
You spend much more money without a list and when you are hungry. Often, you’ll even get home and discover you didn’t even get half the things you went to the store for.
Eat a snack. Make a list. Check it twice. Stick to it. End of story.
5 – Wait and Think
We’ve already determined that not spending any money at all is a great way to live below your means. This is another way to avoid spending money and ensure you don’t experience buyer’s remorse.
If you see something you want, don’t buy it right away, step back and wait for a while.
Some have a 72-hour list where they write down a thing they want. If they still want it after 72 hours they go buy it. This gives them time to really evaluate why they want the item and if it will be useful for them. You can print your own 72-hour list from the free resources.
When a purchase doesn’t already fit in a designated category in your budget, then wait if you can.
Don’t make the purchase until you sit down to make your next budget. Then budget it in and go buy it with no regrets. This is important when you want to live below your means.
You can still have things, it’s only a question of when.
When you use this strategy, you’ll often find that you’ve lost that sudden urge or need to have the thing once you’ve waited a while.
For the things you do end up getting, it’s my experience that the joy they bring lasts much longer. The item ends up being more valuable to you than if you had gone for the instant gratification.
Progress, not Perfection
If there was only one thing, I could tell you about living below your means then it would be this: It’s not about perfection. You’ll never be perfect at anything this side of heaven.
Living below your means is about slow and steady progress. You won’t change all your habits overnight and you’re not supposed to either.
Take it one step at a time.
Get back on track when you fall off the wagon.
One day you’ll look up and realised that you are in a much better place than you used to be. You’ll discover that most of the strategies for living below your means have been so ingrained in you that they feel like second nature.