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.
Hi, Kathy
Thanks for sharing this great advice, its good for everyone. Your blog on reading is so full of great insights.
Thank you! Glad you find it helpful. ~Kathy
Hi Kathy, My husband and I have always lived within/below our means. #5 and children is the challenging one. Even when we set good examples and helped them set up good habits when they were young, their financial personalities reveal themselves as adults. Great ten points!
Hi Erica! Good for you and Chuck for recognizing the benefits early on. Something I’ve noticed is that many Canadians seems to live a far more “rightsized” life than many US Citizens. Perhaps it is that many of you strive to set a good example for your children. I realize in this day and age with media and social media that can be challenging but I applaud you for trying. ~Kathy
Thank you, Kathy for your kind comment. Always great information and we can always learn something new. xx
Always great advice, Kathy, and a timely post indeed for us. We are inches from closing on a property deal in Spokane, WA where we will retire early next year. I mention it a little on my blog last Sunday. Funny how the home we are building will be larger than my current home, but only one-third of the price. We refuse to move close to our kids who all live in expensive cities and could move at the drop of a hat. Numbers 8 & 9 resonate as you know, Hans is a fixer, but when we move we will buy a new washer/dryer through Costco, etc. Another issue is Kaiser is not covered where we will live, so Plan B will have to happen. Lots to think about!
Hi Terri! Yay! Looking forward to hearing about your property deal and future move. And yes, change can be uncomfortable and require readjusting. But you and Hans have been “rightsizing” for a long time so I KNOW you know how to live below your means! ~Kathy
Again, some great suggestions Kathy. The one that resonated most with me today is: “#5 don’t overspend—and instead see saving money as a favorable thing to do.” Lets sit back and relax with the money we are not spending.
Hi Gary! Thank you! I know you and Robert are both great rightsizers and have been for a long time. Isn’t the freedom of living below your means so fulfilling? I sure wish I’d learned that when I was younger! ~Kathy
Sorry I’m late to your blog this week. I was busy . . . out shopping. Okay, okay, just a bad joke. I agree with all your points, and practice most of them. Costco gets in the way of No. 7 however.
Hi Tom! I can nearly always count on your comment to make me laugh. And yes, Costco is one of my weaknesses too. I can go in and out of nearly all stores very easily but Costco is really tempting! ~Kathy
Well said, Kathy, as always! 🙂 Technically, we don’t live below our means, as we seem to spend about everything we earn in a year. But, we decide that our freedom and experiences are more important than focusing on work and money the entire time. In general, we live well below everyone’s means. 🙂
We never “celebrate” Valentine’s Day and actually never even think about it, except when we see everything decorated in red.
Hi Liesbet! Well you and Mark are definitely the poster children for living a lifestyle within your means. And yes, I’d agree you live far below most people’s “means.” But as you say, you do it with intention because you live a lifestyle that shows that freedom and experiences are what is important to you. I thank you for the great example you set for us all. Oh, and Happy Valentine’s Day. I have no problem celebrating a holiday without spending a dime! ~Kathy
Hi, I read this with interest because I spent most of my life living well below our means…and delaying gratification along with that. The “I’ll do that someday, buy that someday, live like that someday”. I still cut coupons, wait for sales on things I need, never buy the latest/greatest with all the bells and whistles, and have a “never fly first class” kind of lifestyle. But these days I am actually trying to break some of those habits. I am trying to feel OK spending money on some little luxuries and not feeling guilty for our abundance (the result of years of living below our means). I know that I’m in a very desirable, and unusual, financially secure place… and need to not feel guilty for that. For me, it’s time to enjoy a bit the spending of money…. living at our means (but never over!).
Hi Pat! Thanks for pointing out something very important. While the habits of living frugally can be very good–they can also lock us into thinking we should NEVER buy things for ourselves or others–or go and experience certain things for the same reason. I personally don’t think that is “rightsized.” I believe rightsizing is all about the discernment to know what is REALLY important to each of us and then “voting” with our dollars in that way. Just living any lifestyle–be it over-spending OR never-spending–is more an unconscious habit. It sounds to me that you learned how to do many of the important steps to save money–like delaying gratification–but now you are learning how to focus on what is important to you and hopefully allowing yourself to experience the abundance that you so carefully cultivated. ~Kathy
Kathy, these are excellent suggestions and a good reminder that we can always do better. #8 and #9 have come into play this week for us. We bought very good quality patio furniture 25 years ago and recently considered replacing it with something more stylish. After a lot of consideration and the cost of buying new, we recovered the cushions, again! When we are guided by a life of purpose, glittery things cease to have control.
Hi Suzanne! Yes, isn’t it tempting to rationalize buying something new when something obviously needs to be “replaced?” Thom’s laptop went wonky a couple of weeks ago and we were nearly sure that it needed to be replaced…after all he needs it for work, right? We even called a tech guy to try to fix it but he told it would probably be a “costly” repair and nearly the amount of replacing it. ???? But I just couldn’t believe it was a throw-away because it was only 3 years old. So I just started searching on the internet for possible solutions and lo and behold–I found something, tried it, and fixed it myself! It’s only been a week and I’m still cautious but I’m feeling quite proud of myself! Good for you for finding a wonderful solution for your patio furniture too. And I love your statement, “When we are guided by a life of purpose, glittery things cease to have control.” ~Kathy
Kathy we are the poster children for living below our means – and I’m so grateful for it now that I’ve stopped working. The relief I feel every time I look at our bank balance is immense. I know how little we need to live a full and enjoyable life and I can see that our outgoings are still below our incomings – even without my wage coming in any more.
A friend of mine told me that other day that this year she plans to spend more intentionally and not just buy stuff she likes or that catches her eye. She said that’s probably how I always lived and I couldn’t agree more. It’s amazing how little you need when you don’t equate money with love or with filling a hole in your life. Great post my friend!
Hi Leanne! I LOVE thinking of yourself as a “poster-child” for living below your means! I think when we see and remind ourselves of those benefits you mention we encourage ourselves and others to do something similar. And it’s so very true when you say, “It’s amazing how little you need when you don’t equate money with love or with filling a hole in your life.” Thank you, my friend! for sharing your thoughts with us. ~Kathy
Hi, Kathy – I don’t think that wisdom has a time limit on it (thank goodness). Mentally ‘getting’ something of impotance is what matters. <3
I don’t know if we live below our means but my husband and I often remark that we really don’t want much stuff anymore. Our occasional trips to the mall are to eat lunch on the outside food court, listen to music, and people watch. I can go weeks without making any purchases beyond groceries. I love the comfort of knowing that we can afford to live the life we choose… not because we have vast amounts of money, but because we choose to live within our means.
Hi Janis! I think that any of us that don’t have to stress when an unexpected bill pops up (and they always do don’t they?) then we are living below our means. How far below is only a perspective. it’s that freedom, don’t you think, from worrying about how or where the money will come from. Been there/done that and I’m happy to say that we left that “lifestyle” long ago. ~Kathy
Thanks for these reminders Kathy! I do call and negotiate my cable, my cc interest etc from time to time. I’m getting better about things on sale by not going in stores! I’m not an online shopper thank goodness. Slowly but surely I’m paying down debt and spending $ only on healthy foods (which saves money in the long run!) I appreciate your firm but gentle writing to get us to live smartly!
Hi Joan! Good for you. I’m actually pretty amazed when I talk to people and they don’t know what they are paying (cable or otherwise) so how would you know that it was advantageous to negotiate if you didn’t start there??? And yes, isn’t it funny that when you break that habit of just shopping it feels so foreign to even “have” to shop! ~Kathy
These are great suggestions. The stress of not being able to pay a bill is too much if it can be helped with some budgeting work.
Hi Haralee! It doesn’t seem like much of a tradeoff does it? Far better to be able to pay those bills than stress about it along the way. May we all find ways to do it that fit our lifestyle! ~Kathy
Kathy, I think you were reading my mail when you wrote this post! #1, 3 & 7 ring loud for me. I keep track of monthly expenses on a yearly basis to budget for the coming year. I have clothes in the closet gifted to me by a sister & friend who buy things on sale that aren’t even their size – but it was such a good sale! And shopping has never been an emotional fix. My goal is to live my life purposefully and intentionally. That has helped me financially. I don’t feel any FOMO when I decline invitations to winter destinations or weekend shopping trips that involve hotel stays and dining out because I have a plan for my money and time. #8 sometimes bites me in the butt when I hang on to some implement that is beyond repair and needs replacement but I try to get more use out of it. I guess it’s like the Kenny Rogers song – know when to hold ’em, know when to fold ’em.
Hi Mona! As long as we keep our focus on living life “purposefully and intentionally” I think we are living a rightsized and “good” life. I’m guessing that every one of us has some areas that we are “better” at than others so Kenny’s song says it well! ~Kathy
Hi, Kathy – I absolutely LOVE your statement that living below our means is not about sacrifice but about living on purpose. As soon as we make this shift in our minds, it is easy (and even enjoyable) to follow the tips you share here. I especially liked Tip #10.
Hi Donna! Yes, isn’t it so true? I only regret that it took me/us so long to “get it!” Of course it matters more that we do than when right? And so very important in these times to remember that our VOTES count very much! ~Kathy