Living Below Your Means – Automatically

Living below your means can make an enormous difference in your life — and you can do it automatically. How? By committing to doing two things:

  1. Always saving and investing a percentage of your income, and
  2. never spending money that you don’t already have.

And I do mean always and never.

But it’s hard…

Yes, it can be hard to go from living above your means (or just barely within your means) to living below your means. But that’s often got more to do with it being a shock to your system as you work to break a habit than it literally being hard to do.

Living below your means takes a combination of commitment and perseverance through the inevitable little tests that seem to happen not long after you announce your intention to turn over a new leaf.

But it’s not really that difficult to live below your means in most cases.

In fact, you may not realize it, but no matter how much you’re spending right now there already IS a limit to the amount you can spend. In some cases, that’s called your credit card limit. Occasionally, it’s called the point at which you can no longer get credit. But it is a limit.

It’s up to you to lower that limit.

Start small, but start somewhere

If you’ve already got an emergency fund saved up, paying off debt is one very effective place to start.

If you’re not interested in doing that though, you can at least start by refusing to borrow additional money. Just making that one simple change will begin to free up more and more of your money, because over time you’ll be sending less and less of it away to lenders.

ChangeIf you don’t already have an emergency fund saved up, considering making that your priority. Begin by making a list of what you’re willing to consider an emergency. Keep in mind that in many cases, the longer your list, the larger your fund will need to be — because you’ll be accessing it more often. Then start funding it by having a certain percentage of your paycheck automatically deposited to your emergency fund. You won’t miss it as much if you never see it.

As far as where you’ll get the money for your emergency fund goes, unless you meet the poverty guidelines, I can almost guarantee there is something you could cut back on or change to get a little bit of money to send to savings. (Seriously, if you’re not sure what that could be, email me and I’ll let you know what possibilities I see.) Send the difference that you create to your emergency fund.

(Of course, you can also do what you can to make more money to increase the amount of money you’ve got available.)

Living below your means is satisfying

While it may seem like a struggle at first, that’s mostly because — if you’re like me — you find it hard to say no to the things you or your loved ones want. Or just the the things you’ve been used to doing out of habit. But the thing is, the more you say no to those things now, the more you can say yes later. And saying yes later can be a whole lot of fun, because those yeses will be guilt-free.

Living below your means doesn’t mean a lifetime of self-denial. It means making an adjustment, and then reaping the benefits as you go along. Living below your means is actually very satisfying — because you have money to do the things you want to do; and you’ve built up some financial security.


  • I love this way of saving. If I never “see” the money I can’t spend it.

  • I have tried to make this a normal practice in my life and I’ve done pretty well with it.

    • That’s great :)

      I wish I’d always made it a normal practice, but at least I did start a few years back. It’s made a huge difference.

  • I lived at “poverty levels” last year while doing AmeriCorps. It’s no small task, but it’s definitely helped me live below my means now that I have a job that pays me a decent salary. All I had to do was make sure that I kept myself from scaling up my spending once I starting earning more.

    • Exactly. That’s how I paid off my student loan too. My income was way below the poverty level, so once I finally started making $15 or so an hour it was like I was suddenly rich. So I just kept living like I was making nothing, and got the loan paid off.

  • I have always had a low profile lifestyle and I am conservative regarding debt. It provides many more choices.

  • How true. Living a simpler life can bring peace of mind when you know you are better prepared for the future. Good plan!

  • It feels good keeping expenses down and not burning through extra income just because more starts to come in. Putting money into savings automatically really helps! -Sydney

  • And the nice thing about living below your means? It always works. Whether you make $1B a year or $1K, if you are spending less than you’re taking in you’re getting ahead.

    Financial security: priceless.

  • Very good advice. I have followed the first one religiously! The second one, sometimes failed, but paid it off then

  • Those two rules are great to live by. It’s always amazing how many people could do both but simply don’t do it – due to lack of knowledge, defiance, or indifference. Following both can help a person live a better quality of life than he or she would otherwise have.

  • mtdlv1

    It’s sad that so many don’t recognize that they become slaves to their debt. True freedom must include freedom from debt and the restrictions it places you under.

  • Yup, just gotta make saving a habit.
    I look at friends who make less than me but work just as hard as I do.
    I think, well if they seem to live happy lives and are getting by just fine then so can I.
    So I spend like them, have fun like them and still end up saving more than them.

  • kristina

    Hi there! I just wish our world leaders could read this article. That way they can reduce our budget deficit. As of now I’m also trying to live below my means and I have a simple method of doing it. Here is my method – I do not carry my credit card with me so I can’t make an impulse buy. I also do it even though there is a sale. Sometimes, the things on “sale” are not really on sale. Business enterprises displays a higher initial price than they want it to be then they will show a “discounted price” so that they may attract buyers. But that “discounted price” is really the price that they wanted for the item they wanted to sell. So beware of the pitfalls. I will be looking forward to your next article.

    • I think retailers often show the “MSRP”, and then their price as a discount, so of course it makes you think you’re getting a good deal. You might be, but it pays to do your research and find out for sure. And not carrying your credit cards with you is a good idea; you can’t use ’em if you don’t have ’em :)

  • Dear Jackie,
    Hello, and thanks. Since I began reading yours and Crystal’s blogs, I have made some huge changes. In 2011 I went from being two months’ of my paycheck in debt, working at a job I disliked to just the opposite. After managing to pay off all my debts, I began saving, lost my job (YEAH!) and began my own small but so far successful business. At this point and time, I have two months salary saved in the bank and my pay has doubled since then!

    Thanks for helping me turn it all around this year! I must admit, I feel a lot better :)