Are You Living Below Your Means? Benefits of the Minimalist Lifestyle

by Silicon Valley Blogger on 2011-06-2326

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.

{ 26 comments… read them below or add one }

rocketc February 5, 2009 at 11:12 am

I try to do both, but I certainly lean toward trying to generate more income than reducing spending. One reason is that we already live so tight, that there are not many areas to cut.

Mike Myers February 5, 2009 at 12:16 pm

I definitely earn more than I spend but obviously that is partly due to my current situation. I should try to spend less though and take on that mentality. In fact, I may challenge myself to reduce my average spending month to month.

Moneymonk February 5, 2009 at 1:44 pm

I always focus on eraning more because I’m a Capitalist, but as I earn more, I save more.

watch house February 5, 2009 at 4:21 pm

I always try to spend less… But there are just those times where I see that spending less has given me a nice amount of money saved and so I think to myself: “What did I earn this money for in the first place? ” “That’s right, so I can buy nice things” And I end up spending it all. I always feel horrible afterwards and start saving again. It’s a really bad cycle to get into and a really hard one to get out of.

Christine February 5, 2009 at 4:23 pm

I guess I earn more than I spend. My spending stays the same, and I focus on keeping it the same, not on cutting back. Last year, with no thought or budget, I lived on 60% of my take home pay. This year, with minor cutbacks + a 3% raise, 50%. Next year, I get a 9% raise, and it’ll be 45%, and all I have to do is keep spending the same amount every month.

Ken Deboy February 5, 2009 at 4:37 pm

Currently both, since my job situation is a little shaky right now. For the most part I try to concentrate on earning more. Frugality can only get you so far…


Kristy @ Master Your Card February 5, 2009 at 10:29 pm

I’d have to say I’m a lot like you in the respect that I try to earn more than I spend. I’m actually not very frugal at all. I have to make myself consider my choices, try to trim the fat, and so forth. To be honest, I prefer not having to do that. I prefer making more money then I spend and leaving it at that, though I find value in both suggestions, and employ each of them regularly. But, all things being equal, I’d prefer to focus on the income rather than where to cut my budget.

Tigga @ Forex Trading February 6, 2009 at 12:25 am

I would have said I normally prefer to spend less than I earn – I enjoy saving. But in the present economic climate, with no decent returns on saving, I’m just spending! I guess that’s what the government wants to see us do!

Shadox February 6, 2009 at 1:07 am

I definitely focus on the income side as well. My reasoning is simple, there is a limit on how much you can scrimp, and at least in theory there is no limit on how much you can earn. In addition, I think the whole idea is to increase your standard of living but not rob your future self to satisfy immediate needs.

Miss M February 6, 2009 at 7:08 am

Both, I had to in order to dig out of debt. In the last 3 years I’ve boosted my salary 50% and cut my spending 20%+. I like to work both sides of the equation. If you are a frivolous spender, cutting back won’t be painful and will net big results. If you are already frugal, earning more is the only way to get ahead.

the weakonomist February 6, 2009 at 7:16 am

This is a lot like the frugal vs cheap argument I’ve made over on my blog in the past week. I like how rearranging words in the english language allows us to give them new meanings. I must admit my focus is always on making more than I spend.

Perhaps my goal in life is to always earn more than I spend, because I quite enjoy spending my money. By earning more than I spend, I’m still on the right track.

tom February 6, 2009 at 9:29 am

I don’t think people should live below their means, keep the lifestyle you have and increase your income.

Why should you live below your means? There is so much prosperity on this earth that it’s insane.

Jules @ Money Feuds February 6, 2009 at 3:13 pm

I think mine is a mix of both – I went to lots of school to get some good degrees (which I guess correlates with the “increase income” component). But I am also aware of that income’s limits (most people do have limits at some point, at some degree of expenditure) . So I have specific savings goals based on that income. And a lifestyle that can be sustained within my limits.

Plus, it kind of needs to be both because if you increase your income, you may just increase your lifestyle/spending, too, without even realizing it because know you can afford more and your appetite might grow.

Start-Up February 6, 2009 at 3:41 pm

I’m all about increasing my income rather than cutting my spending. I don’t feel like I spend a whole lot to begin with, but I would much rather work harder and increase my income. Life is too short to live on the minimum. It’s a great subject to ponder.

nina February 7, 2009 at 10:18 am

I focus on increasing my income coz I want to increase my networth. I also cut my expenses on things that I don’t need.

Alison@This Wasn't In The Plan February 7, 2009 at 11:22 am

I like to focus on earning more than we spend, it seems much less restricting than spending less than we earn. But, at the same time, it’s important to not let that spending creep up too much, to the point that it is constantly catching up to what is earned.

Cathy February 8, 2009 at 1:11 am

I had this habit of spending every dollar every time cash came in (but that was like..five years ago). I like having extra money on hand/inside my wallet. So I guess I try to earn more than I spend. February 9, 2009 at 12:09 am

I think you have to do both (try and increase your income, and try and cut costs).

Alex June 23, 2011 at 3:10 pm

This is a wonderful article! Like you said, I think it is important to do both in order to build a substantial net worth. I got into debt by incessantly buying clothes, gadgets etc. and it’s only now that I am starting to see the attractiveness of a minimalist lifestyle. Clutter equals stress, and if you get into the mindset of “keeping up with the joneses,” you’ll never be satisfied because there is always more to buy.

Silicon Valley Blogger June 23, 2011 at 4:07 pm

Thanks for your kind comment! I really believe that the simple life holds a lot of attraction, if you give it a chance and just think about it. I think a lot of the issue is as you said — the idea of competing with the people around you. Imagine if you could just move somewhere where things are quieter and simpler, then you wouldn’t have so many temptations. The question we can ask ourselves is: how much influence do our families, friends and neighbors have on our spending? And if so, isn’t it rather strange that we are allowing other people to influence what we do with our money?

If you can break this psychological bond of feeling like you have to keep pursuing the “trend” or “fad” of the moment in order to “fit in”, then you may just be able to see improvements within your budget. Unfortunately, too many of us feel beholden to the Joneses. Don’t let them control your wallet!

STRONGside June 24, 2011 at 5:32 am

I am working towards the minimalist lifestyle. I have been encouraged towards that goal because I get so frustrated with having to buy so much useless products just to keep up our current lifestyle. it makes me sick, and I really want a change. Considering selling our home and downsizing, and even purging a good bit of our stuff. It’s to the point now where a change needs to hapen fast!

rente-doorlopendkrediet June 25, 2011 at 3:35 am

If you’re in a situation where you find yourself not having the money you thought you had and you have to make a decision to live below your means, ask yourself this; how much do you care about the lifestyle that you are living now? Is the answer “a lot”? Then I suggest you take another approach: instead of living below your means, why not choose to generate a new income? 😀 Let’s hear it for passive income!

Money Reasons June 25, 2011 at 1:56 pm

Ironically, I’m working on this phase right now. And I’m starting with my basement…

Yep, if I can get through the junk down there, I can then tackle the things in my normal living areas. I bet you never heard of cleaning your basement as a step towards becoming a minimalist 🙂

Phoenician Investment Fund Fiu June 26, 2011 at 10:06 am

God this is so true. It is all too often the case that people spend all their money, and thus are not solvent. You could be out of work for 3 years, who knows.

Cathy B June 28, 2011 at 6:00 am

I have found that going through all my”stuff” (garage, basement, closets & bureaus) has generated quite a few extra dollars by putting them out for yard sales, on CraigsList, etc. You would be surprised what people will buy (I had a box full of wooden ends that came off the dowels on the porch when it was made – a guy came and bought them so he could use them to practice with his lathe). Put anything and everything out – the worst is that it won’t sell and you can donated it then to (wherever) and write it off on taxes as charitable.

I’m not in a position (gvt. job) to have more income (unless I get another job, which I don’t intend to do), so I have chosen to live below my means. I have less than basic cable (called the cable co. and asked them to lower my internet speed to the lowest – never even notice the difference, and has saved me $20 monthly on the bill). I make my own laundry detergent which does save me a considerable amount of $$. I like to use saving money/cutting back as a game to see how much I can cut back and still not have it “hurt”, and think of all the things I learn along the way.

I’ve found when you DO start sorting out your “stuff” that you’ll see what you can life with and what you can live without. A clean/organized house leads to a clean/organized life. You’ll feel better about yourself in BOTH instances (and maybe even become a role model for someone)!

When you feel good about yourself, you don’t have the need for “things” b/c you don’t have to “prove” anything to anyone else, by all your “things” – appreciate what you have, and take care it, and you’ll find out that less is more.

The Debt Darling July 8, 2011 at 11:29 am

I reduce everything from groceries, to phone, to interest rates. Every time I think I have reduced all I can, I find another way to reduce expenses. I have recently started shopping around for new internet service. Time Warner just keeps raising the prices!

Leave a Comment