I’ve often discussed the concept of how to live below your means. I believe that it’s the cornerstone of living well in the financial sense, so I’ve decided to reflect on a couple of financial philosophies that all of us have been practicing in some form or another. I revisited the questions:
They sound like they’re the same thing at first glance, but when I reflect on these questions, I realize they don’t exactly mean the same thing, and that I lean towards the approach of “earning more than I spend” more than I do its counterpart. I prefer to earn more than I spend — meaning that I focus more on income generation than I do on cutting costs, although I definitely employ both tactics in order to build my net worth. This is the case because I’d like to have the option of being able to enjoy creature comforts and a few luxuries on occasion. Having money simply means having more choices.
Others, of course, are much more adept at making thrifty choices, keeping their eye on their spending behaviors and sticking to a well-managed budget. The interesting thing about the frugal approach though, is that it works best when it’s coupled with a particular mindset and attitude. It’s tougher to live frugally if your heart isn’t in it, so I thought I’d touch a little about the kind of mindset that makes frugal living come naturally. This thinking is held by those folks who embrace the minimalist lifestyle in order to consistently keep their expenses under control. Going this route takes a shift in attitude that is easy for some but more challenging for others. But it’s worth seeing WHY this type of lifestyle is attractive to genuine frugalists:
Benefits of The Minimalist Lifestyle & Living Below Your Means
#1 There’s less to budget.
Keeping up with modern society can be hard. You only need to look at the wide range of gadgets and electronic toys around today to know that there is always something shiny and new that beckons the consumer. If you fall for the temptation of loving all the latest things and desiring “stuff”, you’ll be succumbing to an expensive habit. Wanting to buy and own things regardless of their value or use to you can put you on a spending cycle that’s tough to break.
However, if you live a simple lifestyle, your focus moves elsewhere, perhaps to activities you enjoy doing (for free), to work you like to do or to people you like to be around. When you do decide to shift your perspectives, you’ll find that your spending just drops on its own. You may also find that your quality of life increases in other respects, provided that you maintain a positive outlook.
#2 It can lead to less stress.
No doubt, having financial struggles can be a huge pain and can lead to quite a lot of stress. To get out of this situation, you’ll need to start by knowing exactly how much money is required to meet your prioritized needs. If you have selected a pared down lifestyle, your expenses will be far less than they would be if you had gone for a more traditional consumerist lifestyle that’s fed by the credit industry. Living simply often means that you’re living with less stress because you aren’t held hostage by your possessions, your debt or your credit cards. You could decide to trade “stuff” for freedom and peace of mind.
If you’re struggling to make ends meet, ask yourself why you’re in this position. Is it because you’re earning little or is it because you’re spending a lot more than you need to? Be honest!
#3 A clear home means a clear mind.
When your home is full of “stuff”, then it’s probably pretty cluttered. And therefore, you’ll probably be constantly looking for your things, hunting for stuff you’ve lost, wondering where this, that or the other has gone, and fretting over not having enough space.
If you’ve ever done spring cleaning or have decluttered your home, you will know how refreshing and liberating it feels. Clearing the junk in your home and organizing what you have left can lead to a clearer mind later on. Can you see how all of these factors tie together to make you feel less stressed, more relaxed and happier with a smaller amount of money?
What’s Your Approach To Living Beneath Your Means?
There are certainly a lot of things that are appealing about a simplified, minimalist lifestyle. In my case, while I believe I’m frugal, I also find myself enjoying the challenge of trying to increase my income. So I’m probably not quite ready to give up on chasing my dreams or ambitions — not because I’d like more money (which would be nice), but because of the sense of fulfillment and accomplishment I experience with each small success.
So do you focus on earning more or spending less? What do you think about downsizing and living more simply?
Created February 5, 2009. Updated June 23, 2011. Copyright © 2011 The Digerati Life. All Rights Reserved.