Living Below Your Means: The Secret to Financial Freedom

When I got my first job, my father sat down and gave me valuable advice. He said divide your wage into three categories. He said,

?allocate 30% of your salary for your expenses, 30% for your savings or investment, and the remaining 30%? You spend it as you want.?

This is what living below your means.

It means when you decide that you will spend less than you earn.

In this article, I will help you understand how to find balance in your life while achieving your financial well-being. I will take you on a journey of learning what living below your means is and how it can be beneficial for your life.

Additionally, I have curated a few effective tips to help you live below your means. 

The concept behind Living below your means

You are living below your means deciding to spend less and save more just for your financial well-being.

In simple terms, you are managing your expenses. You have leftover money at the end of the month. You may have stopped living from paycheck to paycheck. Or even if you are not in a rush to pay more debt just to live and pay for expenses.

This is important. In today?s world, everyone should follow the same lifestyle in some way. Living below your means is more like you are cutting down on your expenses just to save money for the future.

Now the real question comes up: Is it possible to cut your expenses? Increase your savings while living a comfortable life. That is what living you below literally depicts.

Don?t worry; you won?t just have to stop having fun in your life. It?s like choosing a sustainable life, prioritizing what you truly need. So that you can live a healthy life of your choice while saving money for a great future.

What are the benefits of living below your means?

Living below your means is a very wise move towards financial independence. There are also a lot of benefits to living within your means. In this section, I will discuss those benefits to help you understand:

Always keep you prepared for emergencies

If you can successfully manage your finances, you can save a certain amount for emergencies. The money you will save each month can help you build a safety shield.

On top of that, you can also get a sense of peace even during an emergency or unexpected expense. For example, you won?t have to stress if your food blender suddenly stops working. You have your money saved.

Saving for bigger purchases

We all plan for something grand in our life. It can be a dream international trip or buying a Prada red leather bag. These come under the big expenses here; you make a huge investment only once in a lifetime.  

If you learn to live below your means, you will have more space in your budget to start saving for your big purchase. Try to cook your favourite food at home instead of dining out. This can help you save money effectively.

Financial freedom means more confidence

Living below your means also helps you gain financial freedom. You will feel less stressed about money once you stop living from paycheck to paycheck. You even have to be concerned about your increasing credit card debt.

Living within your means makes you a responsible spender and saver.

When I started to live within my means, it was hectic for me to plan and spend. As time passed, I got the hang of it, and eventually, it made me a responsible saver and feel confident.

Once you start living below your means, you will gain confidence and see more opportunities for the future.  

A healthy and happy lifestyle

Living below your means also allows you to achieve mindfulness for your spending and lifestyle. The moment you start watching your finances, you become a responsible spender.

You can start cooking at home, spend less on unnecessary things, and avoid buying pizza every single day. You can also avoid spending money on food orders or high-priced gases and pick up the habit of walking or biking. This can be safe for both the planet and your financial planning.  

Less stress about saving money

According to CNBC, 73% of Americans are stressed about money. When you live below your means, you feel less stressed about what you will save or how to live properly on your paycheck.

Remember, if you aim to save some room left in your budget, it doesn?t mean you will have to buy less stuff that can worsen your living.

Just follow a plan and make a good budget to help you manage everything.

Financial security

When you start living below your means, you eventually learn how to handle your bills and expenses without worrying about it. Your letterbox will stop getting overfilled with due letters or your credit bills. Your savings also save you from unexpected expenses that might just suddenly pop up.   

Once you achieve living within your means, you become able to take important steps towards a safe future and great financial security.

The steps to follow to live below your means

Financial freedom is more like a distant dream for many of us. But the secret lies in just one single strategy: living below your means. You don?t have to make a drastic lifestyle change or anything. Here?s how you can start with one:

Awareness is the main key

Start observing your spending patterns. Keep track of your income as well as expenses. At least, try to do this for a month. Look for any leaks that might surprise you.

Remember your first step in taking control of your money is to recognize where the money goes.

Budgeting can help you to achieve success

You can try making a realistic budget once your spending habits are clear. Once your budget is set for a month, allocate your funds for your monthly essentials like groceries, rest, etc. But do not forget about saving your money as well.

There are various kinds of budgeting tools that you will find online. You can take help from there to craft your budgeting plan that aligns with your lifestyle. 

If you are planning to live below your means, you can also start living a minimalist lifestyle. In this way, you will be able to prioritize your needs, wants or what your expenses are.

Sticking to these few steps can help you to create a buffer zone between paycheck and spending. This can help you to have your financial freedom, pay off your debts on time, and save for future goals, to achieve peace of mind.  

There are two key things to focus on to live below your means

Living below your means can help you unlock the door to financial freedom. Here?s how you can do that:

Firstly, you will have to ditch the mentality: the bigger, the better. Always resist the urge to buy expensive cars and houses that can stretch your budget thin. Then, opt for the practical options that can help you to have some room for your savings.

Secondly, remember your awareness is your ultimate power. Try to keep track of your monthly spending. Every coffee you are paying for or the dine out keep track of everything.

This can help you to understand how you can control your spending habits and empower you to cut back on your expenses, Confidently!

The additional tips that you can follow

Apart from the tips that I have shared above, there are some additional tips that you can follow to achieve your financial freedom by living below your means.

1. Embracing New Technologies: The budgeting applications can help you to simplify your track record for your income and your expenses. The applications can categorize all your spending, and determine the areas where you can cut back on money.
2. The 125% Rule: When you decide on making the purchase, take a moment and ask yourself if you would still buy the certain thing if it was 25% more. If you realize the answer is no, stop yourself and reconsider if that?s truly your need or not.  
3. The 50/30/20 Rule: This is considered the most popular strategy which teaches you to allocate effectively. Allocate 50% of your income for your needs, 30% for your wants and the rest of the 20% can go to your savings or to pay off your debt.  
4. Teamwork and Collaboration: Now if you are a couple, always try to be honest about financial goals. Discuss it with your partner and create a budget planning that can suit you both.

Once you start tracking your progress and adjust as per the need, it won?t be tough for you both to be on the same page.  

Wrapping it up!

Living frugally can help you to unlock financial freedom. By being mindful while prioritizing your needs over your wants, you can empower yourself to save your long-term goals. Try to choose a budget-creating application that suits you well. Look for new ways to save money and achieve the financial independence you want.

For Getting More Informative Article:

• Mastering the Art of Budgeting: A Comprehensive Guide for Beginners
• Embracing Sustainable Living: A Step-By-Step Guide to Going Green
• Top 10 Effective Money Saving Strategies for 2024