Top Tips for Living Below Your Means
The reason to live below your means is simple and compelling: Doing so will let you save money, invest, and build up a retirement fund. Learn how with our top tips.
Buy store brands
When it comes to daily necessities, choose store and house brands instead. Often, the difference in quality is acceptable, even negligible. Wholesalers sometimes supply the exactly same product to branded retailers and house brands, so the only difference you are paying for is fanciful packaging and perhaps higher visibility on the supermarket shelf.
Take care of your belongings
Beyond looking after your things so you don’t lose them to theft, accidents or other mishaps, consider regular maintenance of your big-ticket possessions such as your car, computer and air-conditioning system. Keeping them in tip-top shape assures you of the freedom to upgrade when your finances allow, and not a moment before.
Cut back on luxuries
Living below your means does not mean leading a life of deprivation. You can still enjoy your favourite treats and activities, but you should do so with more awareness and restraint. Start by reducing the frequency of your regular habits. For example, if you buy a cup of gourmet coffee daily, choose one day to skip the coffee (or switch to a cheaper alternative) and put that money into a glass jar where you can see it. Over time, cut down your coffee habit to once or twice a week, each time putting the money you would have spent into that jar. Soon, you will realise how much you are spending on a luxury item, and you would have transformed an expensive habit into a treat to be enjoyed occasionally.
Use cash only
As far as possible, pay for all your expenses using cash. The sight, scent and feel of money being taken out from your wallet to pay for what you want will put you on alert, helping you to gain awareness – and therefore control – over your expenditure.
Find free (or cheaper) entertainment
After fixed expenses, the primary reason we spend money is to purchase some form of entertainment. To stay within your budget, look around for alternative sources of entertainment. Instead of buying novels, borrow them from the library. Instead of going out to the movies, rent a copy and have a cosy movie night with friends and family. Instead of buying an entire album, sample the tracks you really want and purchase them piecemeal. Go for a walk in the park. Visit the museum. Take up a hobby like gardening or cooking. The possibilities are endless.