Live a Well-Designed Life Quality of Life

Living within Your Means

Living within your means isn’t just about cutting costs and saving money. It’s about taking control of your money, so it doesn’t control you. When you live below your means, you have the power to calmly handle an unexpected car repair or medical bill, save for retirement and fund your dreams.

A good rule of thumb is to live on at least 15% less than the amount you earn. Here are my best tips for how to live below your means without feeling like you’re missing out.

Create a plan for your money

Start by creating a monthly budget that outlines your income and expenses. This will help you identify areas where you can cut back on expenses and allocate your resources more effectively.

READ MORE: 10 Practical Budgeting Tips

The act of assigning a job for every pound can be empowering. The popular 50/30/20 budget divides money into the categories of needs, wants, savings and debt repayment.

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Find Ways to Save on Spending

Keep track of your spending to ensure you stay within your budget. Use a spreadsheet or a budgeting app to monitor your spending habits and identify areas where you can cut back.

Focus on spending money on the things that matter most to you. This means allocating a larger portion of your budget to essential expenses such as housing, food, and healthcare while cutting back on discretionary expenses such as entertainment and shopping.

READ MORE: The 50/30/20 Spending Plan

Look for ways to save money on everyday expenses. For example, consider buying generic brands instead of name-brand products, and take advantage of sales and discounts.

READ MORE: Some of my Favourite Money Saving Tips

When spending money, it’s worth considering ways to save on your purchases. A few of my favourites include:

  • Avoid Impulse Buys:  If you want to know how to live on less money, one of the keys is avoiding impulse buys. Often, impulse buys result in needless spending. One way to avoid impulse buys is to implement the 30-day rule. Avoid purchasing until you’ve waited 30 days. If you still want something after 30 days and can afford it, great! But chances are, after 30 days, you will have long forgotten the purchase you intended to make.
  • Use a Cash Back Credit Card:  If you’re diligent in paying your bills in full each month, consider using a cashback credit card for all your purchases. If you get, say, 1.5% back on every purchase, it’s like getting a discount on everything you buy.
  • Round-Up Spending:  If you’re spending money anyway, you might as well invest a little extra to start building wealth.
  • Use Honey for Online Shopping:  I do almost all my shopping online these days. While Amazon is my go-to, I occasionally make purchases from other places. And when I do, I’ve found that using browser extensions like Honey can save me money. These browser extensions provide coupons for the items you’re purchasing. It takes almost no effort to save using these tools!
Some of my Favourite Money Saving Tips
READ MORE: Some of my Favourite Money Saving Tips

Pay yourself

When you finish paying off something, whether a smartphone, car or college education, continue making the same monthly payments you’re accustomed to – but direct them to yourself. Stash the money in an interest-bearing savings account, and let it accumulate. The next time you want to buy something, you can pay cash – and feel the opposite of deprived.

Invest in your future: Consider investing in your future by saving for retirement or furthering your education. This will help you achieve your long-term financial goals and ensure you can continue to live within your means in the years to come.

READ MORE: Working towards Creating My Ideal Lifestyle, not Retirement

Build an emergency fund: Start building an emergency fund to cover unexpected expenses such as car repairs or medical bills. Aim to save three to six months’ worth of living expenses in case of emergencies.

READ MORE: 7 Ways to Build an Emergency Fund

Working towards Creating My Ideal Lifestyle, not Retirement
READ MORE: Working towards Creating My Ideal Lifestyle, not Retirement

Cut meaningless expenses

Are you eating out too frequently, subscribing to boring cable channels or paying for unused memberships? Eliminating costs you don’t care about frees up money for things you truly enjoy.

Try this: Write down what you value in life. Then look closely at your last few financial statements. Do your purchases match your values? You might find that small changes can help you stop spending money on unnecessary things.

Avoid debt: Debt can quickly spiral out of control and put you in a difficult financial position. To avoid debt, try to live below your means and only borrow money when it is absolutely necessary.

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Cut Your Housing Costs

If you want to learn how to live on less money, I always recommend starting with the areas that will have the most significant impact. In general, these tend to be your fixed expenses – those for which you pay the same amount every month. Some examples are housing, transportation, and loan payments. 

Housing is the biggest expense category in most people’s budgets. If you are serious about living on less, consider paying back this expense. 

Some of the best ways to do so include:

  • Downsizing:  Downsizing your home will result in lower mortgage payments, property taxes, and maintenance costs.
  • Rent vs. Buy:  Consider whether it makes more sense to rent vs. own your residence – after all the “extras,” renting sometimes makes more sense.
  • Identify Income Opportunities:  Find ways to turn your housing into an income generator; ideas include renting out a room, buying a duplex and renting out the other unit, or even turning your place into an Airbnb when you’re on vacation!
Things I Stopped Buying
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Spend Less on Food & Drink

Continuing down the list, people tend to spend a fortune on food and drink. I’m as guilty as anyone in this category. I like to shop at Whole Foods and M&S. Doing so isn’t cheap. But as a tradeoff + it’s just me, I rarely eat out (once or twice a month). 

It’s not about sacrificing with your money (especially when it comes to food), but it is about prioritising. Want to reduce what you spend on food? Here are some ideas to get you started!

  • Eat Out Less:  It may seem obvious but eating out less will save you a lot. And when you do eat out, consider drinking water. It’s a lot cheaper than alcohol or soda and a lot better for you.
  • Shop Mindfully for Groceries:  Go to the store with a list. By planning your meals, you’ll be less likely to buy things you don’t need vs. if you just wing them. Also, look at what things at the grocery store cost. Consider eating more vegetable-based foods to save money. Lastly, buy what’s in season. When fruits and vegetables are out of season, they cost more.


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Reduce Your Energy Bills

While maybe not the biggest line item in your budget, utility bills can be painful. And they’re one of the areas of your budget you have a lot of control over. If you want to save money on utility bills, use energy-efficient products. Some ideas to consider are:

  • Get a Smart Thermostat:  A smart thermostat learns when you’re home and is highly programmable to help you save money.
  • Replace Your Lightbulbs with LEDs:  Not only do LEDs use much less energy, but they last a very, very long time. While they cost a little more upfront, they’re an excellent long-term investment, particularly for lights you use often. 
  • Use Smart Power Strips:  A smart power strip can shut off your electronics when you’re not using them, helping you save money. I have yet to implement these in my home, but it’s on my “to-do” list, as I know I could save some money.

If you’re already using energy-efficient devices like those mentioned above, make sure you’re doing the little things like turning off lights, unplugging items from the outlets, hanging up clothes instead of using a dryer etc.

Drive used

Do you really need that brand-new car that loses 20% of its value as you drive it off the lot and comes with a £500 monthly payment? Purchasing a second-hand car, and paying cash, means you skip the stress of an auto loan on top of other expenses of car ownership. Remember, your car is only transportation. Used cars from rental agencies are good to buy – low mileage and under warranty.

Other Tips & Tricks to Live on Less

  • Spend Mindfully Around the Holidays:  It’s easy to over-indulge in gifts for others during the holidays. I am as guilty as anyone in this regard, as I like to spoil friends and family. Instead, plan for this spending throughout the year and stick to that budget! Check out this post on how to do Christmas on a budget to learn more.
  • Sell Clutter:  Want to bring in some extra cash? Consider selling your old items that are collecting dust around the house on platforms like Facebook Marketplace, eBay, Ziffit etc.
  • Avoid Bank Fees:  Bank charges like overdraft fees are terrible. While they’re avoidable by planning your spending, sometimes mistakes happen. When they do, give your bank a call to see if you can get the charge reversed.
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Rules to Live By

  • Avoid Lifestyle Creep:  Lifestyle creep is one of the surest ways to secure a position in the rat race. Living on less means not inflating your lifestyle when your income rises. Identify what is enough for you and live your life accordingily. 
  • Save from Your Top Line:  Rather than seeing what’s leftover after your spending, save before doing anything else (i.e., pay yourself first). When money hits your account, put it in an interest-bearing savings account, or invest it in an ISA account or something. By paying yourself first, you’ll increase your odds of saving more money. 
  • Track Your Spending:  Cliché? Yes. Necessary? Yes. You will not succeed with money unless you track your spending. It’s as simple as that. I bank with NatWest and they have their own budgeting feature in their banking app.

READ MORE: Are your finances organised?

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I am Kiran and I'm a Lifestyle Coach, Podcast Host, Vegetarian Nutritionist, NLP Master Practitioner, Author and an Interior Designer.

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