Last week I started pulling out all the tax prep paperwork to give to our CPA. Because we both still work and are self-employed, our tax returns are complicated and far above my abilities as a do-it-yourselfer. But as I began going through all the receipts I was relieved to see that in spite of all our expenses—the fun ones like travel, and the necessary ones like medical—we still managed to save a decent amount of money. In other words, thankfully we once again managed to keep our income above our outgo, or “live below our means.” While I realize that isn’t always possible for everyone depending upon circumstances, I do tend to believe that we each continually make certain choices that can help make it more of a reality than a dream. And yes, when we do that, the freedom and peace of mind it brings can far outweigh the effort.
Of course, I’m guessing that many of the people who read this blog are already living below their means. But in the event there are some who are attracted to the idea, but not there yet—I decided to share the top ten strategies that have been the most meaningful in my life. And even if you’ve heard of them before and already take them to heart, if you’re anything like me you appreciate being reminded of their importance.
Still, I don’t want to minimize the challenges that each of these can present to individuals. Even when we remember we do have a choice, that doesn’t mean the choice is automatically an easy one without hardship. I just tend to believe that once we see our options—we are far more able to make it if we have an endpoint in mind. And for my husband Thom and I, that endpoint was creating a life that is sustainable-meaningful-aware-rightsized-& thankful. In other words SMART!
So here goes in no particular order:
#1 Be a warrior with your finances. I realize that sitting down and figuring out how much money you spend for necessities—or fun—can be anything but fun! However, if we really need to have a close estimate of what we need before we can decide what we can cut or spend, this step is necessary. I have a number of friends who, when I ask them what they are paying for gas or electric each month, don’t have a clue. They say, “I just pay the bill, what can you do?” But if I ask them why they don’t pursue putting solar on their house or renegotiating that cable bill, they don’t want to talk about it. I think it’s good to remember that a “warrior” never avoids what lies right in front of them. And I also believe that the only time we can make a conscious choice is when we are willing to meet it face-to-face. Be strong!
#2 Tailor your current home size, location, amenities and looks to your needs—not your dreams. Again, I routinely talk to people who insist they can’t move from their longtime home because of one excuse or another. Some say they can’t give up their home because of all the friends in the neighborhood, others because they have grown children still living there, even more because they have a house stuffed full of things they have accumulated through the years—and the idea of letting those things go is just too painful. I get it. A home can be a very personal expression of who we think we are—but if we are hanging on to a house when we really can’t afford to stay there—then we are jeopardizing our future for the memories of the past.
I also know a few people who know they can’t afford to live where they live but refuse to explore options that would allow them to stay put. Examples? Take in a roommate or two, rent all or part of your home on Airbnb, or if you like pets, try your hand at pet sitting. All of those options are ways to help you stay put and bring in extra money. Just because cost wasn’t a problem in the past, that doesn’t mean you can’t adapt to a new reality.
#3 Refuse to spend your money on things in an effort to relieve boredom, loneliness, depression or unhappiness. Although those issues can be tough to face, spending money to anesthetize yourself, especially when money is tight, will only make it worse.
#4 Always remember that spending money does NOT equal love. Next week is Valentine’s Day and already the commercials are jammed with images of why we need to shower those we love with expensive and glittery gifts. I think we know deep down that we can’t buy love, but the cultural messages are relentless. Think of Christmas or birthdays and how much of the success of those events is measured by the number and price tags of the presents? Just say no! Refuse to play the game. Spending money hoping that others will see that you love them—especially when you really can’t afford it—is not helpful to them or to you. And never, ever believe that your value or worth is tied to what others buy and give to you.
#5 Train your spouse, children, friends and family to not overspend—and instead see saving money as a favorable thing to do. I read one time that we “teach” other people how to treat us. If we act impressed if they buy us something pricy and extravagant, we teach them to buy us more. If we brag to those who love us about what we own and buy, then we teach them that those things are important to us—and thereby them. If we offer encouragement when they save up for their purchases rather than put it on credit—we are helping them make good financial choices. Let’s teach each other to live below our means.
#6 Remember that the only one who “fixes” your income is you. I read recently that a person who recommends living below your means is really just telling you to “live small” or give up on your dreams. Not true! Living big or having and fulfilling dreams has nothing to do with your income. In fact, if you are smothered in debt it is very unlikely your dreams will ever happen. But that doesn’t mean that you can’t use your imagination to create more income when needed. Like I mentioned above, there are usually ways a person can increase their income in little ways. Much of the time, the only thing holding us back is our excuses.
#7. Don’t fool yourself into thinking you are saving money when you buy things on sale. Do I really need to explain this one?
#8 Always try to fix or repair what you have first—rather than automatically buy new. I get it, I like the newest and latest thing. But not only is it wasteful from an environmental perspective, it is extremely wasteful for your finances. Besides, if you take on a repair as a project, it can add enjoyment AND a sense of pride to your life.
#9 Focus on buying quality rather than quantity. This one was difficult for me because I trained myself to be a bargain hunter. But as I wrote about a while ago, “cheap isn’t always a bargain.” For example, when I started buying quality clothing rather that the latest fashion as cheap as possible, my wardrobe improved and I ended up saving far more in the long run.
#10 Consider that every dollar you spend (or don’t spend) is a vote for what you consider to be important to you. In an election year, I think this analogy works perfectly because when we vote we are technically voting to elect or endorse the people we trust, and believe best represent us, or we are letting others make those choices for us. Likewise, how we choose to spend, or not spend our money shows clearly the values, principles and ideals we hold most dear. Recognize it or not, the votes we place today hold consequences over in the short term and the long term of our lives.
I think it is critical to realize that living below your means doesn’t mean sacrificing. Instead it means living on purpose. It means consciously choosing what really matters to you rather than blindly following the crowd. It makes money a tool that we use in life, rather than system that “uses” us by driving us with impulses, compulsions and behaviors that do not serve us. Again, I realize that that most of this isn’t news to many readers of SMART Living 365. But I’m a big fan of reminders and encouragement—so just taking the time for me to spell these out to offer them with all of you has been helpful to me. And after all, sharing ways we can all potentially live happier, heathier and more meaningful lives is what SMART Living is all about.