Living below your means is all about three things: saving money for the future, giving yourself a cushion (or emergency fund), and avoiding debt. There are many ways to live below your means, like eating at home more often or sticking with a basic phone plan.
Consider it like this: if you’re unable to increase your savings account balance every month while not increasing debt, then you’re definitely not living within your means.
The following tips are not about the newest fashions or the latest gadgets. They are about how to live well while staying within your budget.
Ways to Reduce Expenses
Often the best way to start living within your means is to reduce your expenses. Start by creating a budget plan using your last three months’ expenses, at minimum. Only until you know what you’re spending your money on each month can you attempt to reduce your expenses using the approaches below.
1) Switch mobile, internet, and streaming video providers and take advantage of deals
The digital age has been a time of great change for the global economy. It has changed how businesses operate and how people consume content. The internet is now the most important tool in the global economy with companies such as Amazon, Netflix, Google, and Facebook dominating users’ daily lives.
The internet has also changed how we communicate with others – both in our personal lives and in our professional lives. Social media such as Facebook and Twitter are used by millions of people every day to communicate with their friends or fans about what they are doing, what they are watching, or what they are reading.
With that said, that doesn’t mean you need the latest iPhone on an unlimited 5G data plan through Verizon Wireless. When my wife and I switched from Verizon Wireless to Ting, we saved a ton of money and didn’t go beyond our allotted data every month. Then we switched from Ting to Mint mobile and save even more money every year.
You also likely don’t need gigabit-speed internet service from your favorite neighborhood fiber optic cable company. How do I know that’s true? I was a network engineer for a long time, and most companies still rely on 100 Mb/s speed internet circuits. To put that into layman’s terms, that’s 1/10th the speed of gigabit. If businesses don’t need gigabit, you don’t either.
While you’re at it, consider cutting the cord on cable. It’s 2021, folks. Cable service is dying a fast death and the rise of streaming service platforms is here to stay. Drop the HD DVR and switch to Netflix, Hulu, Amazon Prime Video, Paramount Plus, and whatever other service has the type of shows you like to watch.
2) Cut out unnecessary expenses such as a gym membership if you prefer running outdoors
A great way to save money is to cut out whatever expenses are non-essential. Remember, there are many ways to make small changes in your daily lifestyle to offset a large outgoing expense.
If you are the type of person that prefers running outdoors, then a gym membership is not an expense you need to spend money on. Not only are memberships expensive, but most people who subscribe don’t even use them 24 hours a week much less during a 30-day period!
This makes their memberships virtually worthless due to the lack of exercise they’re getting and how much worth an individual gets out of their membership in a given year – even if their monthly bill is only $10 a month.
3) Learn to cook instead of eating out every night
As an extreme or cautionary example of how unnecessary expenses can add up quickly, imagine racking up $20 restaurant meals every single day – in a year’s time this would amount to $5860 spent on edible food alone! This figure does not include the calories consumed nor any alcohol or any other entertainment expenses.
This is one area I am most guilty of violating. I hate to cook, and on the days when my wife is working second shift at the hospital, I have to feed the family.
In years past I wouldn’t think twice about ordering delivery, especially during the pandemic throughout 2020. This year, however, I decided to cut back on the amount of delivery and take-out food I order and our savings reflect that change quite positively.
4) Buy used items when possible
When buying used items, check for any damage or issues at the time of sale, especially when it comes to big-ticket items like computers or televisions.
You should expect to have a certain level of trust and responsibility between buyer and seller when you make a deal outside of an official setting. All components should work as advertised, and any damages should be repaired or disclosed before you take ownership.
This is especially true for electronics because a nonfunctional component can ruin your experience with the whole product.
Other things you should consider buying used instead of new are cars, furniture, cookware, clothes, books, and bed sets.
5) Find ways to get free entertainment
One way to get free entertainment is by watching videos on YouTube. YouTube offers a wide variety of videos and channels that can be watched for free, whether it’s from past videos or live feeds.
YouTube also offers different categories, such as Music, Sports, Lifestyle, Gaming, and Education. With all of these categories to choose from, there is bound to be something that can interest anyone.
Other ways to get free entertainment include reading magazines at the library or watching over-the-air TV instead of cable, playing cards or board games, and reading a book.