How to Live Below Your Means and Be Happy

Updated on September 7, 2018
Robie Benve profile image

Robie is a writer interested in frugal living and ways to acquire financial strength. She got her MBA from the University of Venice, Italy.

Tips on how to save and leave happy on a tight budget - based on my personal experience. Understanding needs vs. wants.
Tips on how to save and leave happy on a tight budget - based on my personal experience. Understanding needs vs. wants. | Source

Living Below Your Means - What Does It Mean?

The ability to live within your means is a great asset in any financial situation.

Many people struggle to make ends meet. Often, the family income could be enough to live in a more relaxed way, but it does take some effort and consistency to live below your means, adjusting your spending habits to be less than the money you bring in.

How do you do that?

We Are a Frugal Family that Likes Good Stuff

If you are similar to me, you are good with money, you love to find good bargains, and you hate to waste.

In short, we do our best to get the most out of every dollar spent, we are frugal.


However, I'm not the kind of frugal lady that is super comfortable in thrift stores and yard sales, I buy mostly brand new things. I buy used things too, but not on a regular basis.

When it comes to food, drinks, medicines, vitamins, lotions, or anything that would end up in my family's bloodstream, I am very suspicious of cheap products.

I stick with best/good quality items, trying to find them on sale; I avoid the cheapest products, especially if I don't like what's on the label. I totally believe that we are what we eat.

That said, I'd like to share some examples of my experience in handling finances.

Our rule of thumb is: "If we can't afford it, we don't get it."

To live below your means, the first thing you need to find out is “How much can I spend?”

Knowing how much you can spend requires sitting down and crunch some numbers together. If you need guidance on how to do your own budget, you can find plenty of personal budget articles that tell you how, like this one.

Once you know how much money you have available, make a plan to spend less than that.

One Family, One Financial Plan

It’s extremely important to agree with your partner on how to handle family finances and money. Different opinions on what is necessary and what is frivolous can lead to escalating problems and arguments, especially when money is short. You need to work as a team and be on the same page.


Got a Raise? Don't Increase Your Expenses

My husband and I come from families that have lived through the hard times of World War II and have built their own homes slowly, saving up a little bit at the time, buying things only when they had the cash to do it.

Because of that common background, we fully agree on the main choices of how to handle our finances. After we got married, we rented for one year, and then we decided we wanted to pay for our own place, and we bought a house, starting a 30-year mortgage.

We both agreed that the mortgage would be the only debt that we would ever have, and so we made choices to make that happen - at least until the kids will go to college! When I say we have no other debts than our mortgage, I really mean it: we have bills, but no other monthly payment that includes interests.

How did we stay "debt free"? When we got pay raises, we maintained the same lifestyle as before. That’s the only way to set aside some savings. If you increase your monthly expenses every time your income increases, there will never be money for special purchases or emergency.

Buying a Car Only When You Really Need It

When we needed a car, it had to be a used one, valued whatever we had in the savings account at that time. In the 18 years we’ve been married we have been driving four different cars, but never paid a penny in loan interests.

Car dealers don’t really like that, they want your money, and they love to get you to sign up for a loan with them.

Three of the cars were used ones, purchased from privates. One was brand new, a 2002 Honda Accord, which we are still driving, and we chose it for the reliability, the great gas efficiency, and because we could afford it with our savings.

Avoid Bank Fees or Credit Card Interest

I’m very proud to say that in many years of using credit cards practically for everything we buy, neither one of us has ever paid one penny in credit card interest. That’s huge savings right there.

We use our credit cards for everything, but we know we can spend only as much as we can pay off the next month. I realize this takes some self-discipline.

Some people suggest controlling your budget by taking out the cash you can spend each week. I respect that opinion, but it’s not my style. I can self-regulate my credit card purchases not to go over a certain amount. I don’t like to use debit cards and checks much because if we both spend from the same checking account it becomes difficult to properly keep track of the balance, and we'd likely overdraft it.

When we need cash, we go to our bank’s ATM, to avoid foreign ATM’s fees. Sometimes I pay with my debit card at a store so that I can get cash back.

Charge Only as Much as You Know You Can Pay Off

Using credit cards is a great thing, as long as you do it responsibly. That means paying off the balance every month.
Using credit cards is a great thing, as long as you do it responsibly. That means paying off the balance every month. | Source

Saving Money on Food

We all need to eat every single day, several times a day, so clearly, food has a huge influence on our family budget.

You can save quite a bit of money using coupons. Be careful not to fall into the trap of buying things you don't really need just because of the discount.

If available, use your supermarket’s fidelity card. Not only it makes you eligible for the weekly store savings, but also it gets you discounts on gas at the affiliated gas stations, and when you purchase gas.

I love that program, it really works for our family. We usually save around $600/year just using our store card, without any other coupons.

Eating at home is way cheaper than eating out. Make a meal plan, but the groceries you need and enjoy the home-made food and the savings.

Food has a big influence on family budgets. Packing lunch saves money and can be healthier.
Food has a big influence on family budgets. Packing lunch saves money and can be healthier. | Source

Packing Lunch Saves Money and It's Healthier

Pack lunch to work. Packing lunch is not only a great way to save money, it’s also extremely healthy. Leftovers are a great resource for packing lunches. I usually cook extra portions on purpose, refrigerate them in my super-useful plastic containers, and I’m all set for my husband’s and my lunches.

I pack the kids’ lunch too, even if I have to admit, school lunches are pretty affordable, but my kids end up always getting the pizza, so I prefer to prepare for them something they like and varies their diet.

Don't waste food. After you paid for it, and you spent money and energy to cook and fix meals, any clean leftover should go into a plastic container, in the refrigerator or freezer to be enjoyed on another day.

Note: It is important, for safety reasons to refrigerate leftovers pretty quickly, when they are still warm, to avoid bacteria growing.

Be a Frugal Coffee Lover

Being frugal is great, but for some things, I don’t compromise. Quality and taste of what I buy must be good. One example is coffee.

We are coffee lovers, and can’t get started in the morning without our cup o’ Joe. And we kind of need one after lunch too; it’s our midday energy booster.

We buy the best coffee blends of our choice, no cutting corners there to get the cheaper ones. Only in special cases, we buy fancy coffee, barista style, like on trips.

My husband used to buy expensive take-out coffees during the work days, until he bought a good coffee maker, at a great price, that makes excellent coffee; now he keeps it in his office.

In only two weeks he paid off the coffee machine by making his own cappuccino, saving money and also time, since he does not have to go to the cafeteria anymore.

Switching to Home-made Coffee Can Save You a Lot of Money

Making your own coffee can let you save $800 a year.
Making your own coffee can let you save $800 a year. | Source

Save on Clothes

In Europe sales are very seldom and short, that's what I was used to. When I moved to the USA, I found the US malls being super-stimulating for my shopping-lover self, because there are clearance racks on any given day.

It can be tricky to get out without buying anything, but I’m learning to control the urge to get the deal of the day – it might be a sign I’m getting old, lol! However, when I do need clothes, I only buy what is on sale.

I signed up for email notifications from my favorite stores, and they let me know when major sales are going on. Often, the email has a printable coupon as well.

I’m not big on buying used clothes, that were wore by strangers, and smell like somebody's shed. However, I love hand-me-downs. I raised my children on clothes outgrown by friends' children.

How We Save on Greetings Cards

Whenever we need cards for children’s birthdays, I ask my kids to make one using construction paper, stickers, markers, and other things that I have around the house. The money we save on the card can be spent toward the gift.

Besides the money aspect, I consider this a great learning moment for my kids, plus it makes a cute personalized card for the recipient.

When we need cards for adults, sometimes I do buy them, mainly because I run out of time to make my own. But if I can manage, I make a greeting card using a small original painting of mine. If that does not work out, or look in the $.99 section at the store, there are some cute cards that can definitely compete with the fancy ones.

Fr me, it's not really to save money, because I usually end up spending more on the gift, however, it could be. For us it's more about spending money wisely, I rather invest $3-4 more in the gift value than on the card.

Make Greeting Cards with Original Small Paintings - I wrote an article on this!
Make Greeting Cards with Original Small Paintings - I wrote an article on this! | Source

How We Choose to Save Money on Movies

Like going to the movies? Me too!

Check out if there are movie theaters in your area that show movies for $1-$3. The films on view may not be new releases, but they are new to you. :)

You can cut on budget expenses by canceling cable subscription and getting Netflix, Amazon, or similar service. There might be some adjustment needed, you lose access to cable channels, but those streaming services have a lot to offer, and you can watch on smart TVs, computers, tablets, and phones.

How to Save on Books

A house without books… is not our house. We love books, and thank goodness the children do too.

Since books are expensive, we try to get them from the library as much as we can.
Some books we prefer to own, so I try to buy new releases on sale, and for older books, used bookstores or Amazon are a great resource.

We haven’t converted to electronic readers yet.
Maybe in the future, but for now the idea to give up the physical book makes me sad, so we’ll be sticking to paper for a while.

Great tips on how to live below your means. 10 things you can eliminate to save money.

These are just some of the way to can adjust your lifestyle and still get some good stuff, but making it a little easier on your wallet.


Happy Saving!

Questions & Answers

    © 2012 Robie Benve

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      • profile image

        80l808l08 kim 

        6 weeks ago

        Everyone should check out how to live below your means it's excellent advice..

      • Robie Benve profile imageAUTHOR

        Robie Benve 

        8 weeks ago from Ohio

        Hi Nicole, it sounds like we could be shopping and coffee buddies, lol. Great to hear about your experience! Thanks a lot for sharing and for the supportive feedback.

      • kiddiecreations profile image

        Nicole K 

        8 weeks ago

        My husband and I love thrift stores, but I do like to wash the clothes I get from there first, before wearing them! It's amazing what great deals you can find on items that were hardly used. I agree with you also about not skimping on coffee. We love buying good coffee from Trader Joe's and my grandpa makes fun of us for not just drinking Folgers. That's just not our style! I love to shop also but I'm really trying to be more content with staying home and enjoying what we already have. It can definitely be challenging, but it's worth it! Thanks for your insightful hub!

      • profile image

        Anna R. 

        2 months ago

        It's so hard to not adjust your spending when you get a raise! When it happened to us, we were always so relieved that we could finally afford something, that we end up spending all the extra money, all the time. Thanks a lot for all the great tips! Lots to think about.

      • kyokusiima diana profile image

        Kyokusiima Diana 

        3 months ago from Kampala-Uganda

        quite educating. thank you.

      • Robie Benve profile imageAUTHOR

        Robie Benve 

        5 months ago from Ohio

        I agree, Christine, well-meaning friends sometimes put a lot of pressure on us about conforming to what they feel like is the minimum standard. lol I actually found it very liberating when I moved to the USA from Italy. Everything aspect of your life can be very fashionable in Italy. Here I can wear a top that is 5-years old or have ever-green style furniture from a generic store, and still get a lot of compliments. Thanks a lot for your comment!

      • mulberry1 profile image

        Christine Mulberry 

        5 months ago

        Great information and to me, a smart lifestyle. I'm 60 years old and am very financially comfortable thanks mostly to this attitude. Over the years I found it's also important to be able to ignore much of what society said I HAD to have. Even well meaning friends can bombard you with pressure to spend more. "oh, you can't use that phone, you must have the iPhone X". Even to the point of constant disappointment in the fact that I bought a brand new Mazda sedan vs. a $40,000+ crossover or SUV that they prefer. (even though, as a single now, I have no use for that). Keep it up, you will reach your financial goals and have what you need and what you want (not what everyone else wants).

      • Robie Benve profile imageAUTHOR

        Robie Benve 

        4 years ago from Ohio

        Hi tenordj, I agree, you really can still enjoy life and live on a budget, though it may take some courage to change gears and get started. Thanks for your feedback. :)

      • tenordj profile image

        Jason 

        4 years ago from Jamestown TN

        Thanks for sharing....we have very similar financial policies and when we first started we had reservations about it but wanted to get our financial house in order. You really can still enjoy life and live on a budget and these are great ways to get started.

      • Robie Benve profile imageAUTHOR

        Robie Benve 

        5 years ago from Ohio

        Thanks Joym7, I try to be "reasonably frugal", and it works out well for me. I'm glad you agree with the necessity of living below your means. :)

      • joym7 profile image

        Joy 

        5 years ago from United States

        great hub. everyone should apply these and must be frugal for better family wealth and health :)

      • Robie Benve profile imageAUTHOR

        Robie Benve 

        6 years ago from Ohio

        @ athomeather, great to see I'm not the only one not using coupons. I know it's a great thing, but for the things I usually buy there almost never coupons, so I end up buying things that i don't really need because they are cheap, and they clutter my pantry and often expire on me. !!

        PS: I found your comment marked as spam, sorry about that, it must have been a glitch in technology. Such a nice comment flagged as spam, it sure wasn't me.

        Thanks. :)

      • Robie Benve profile imageAUTHOR

        Robie Benve 

        6 years ago from Ohio

        breath2travel,thank you so much for this fantastic review of my hub, and for all the support, sharing etc.

        You are doing a great thing ensuring that your children get a good understanding of money issues. Way to go!

        Ciao! :)

      • breathe2travel profile image

        breathe2travel 

        6 years ago from Gulf Coast, USA

        GREAT hub! I, too, am not too comfortable with buying used/thrift store purchases. At one time I did - purchased a bunk bed set & mattresses -- and am still battling the carpet beetles that came with the set!

        I buy new items on sale. If it's not good quality, I'm simply not interested. I've taught my kids how to shop smart - and that our dollar buys more than other people's dollars. ;)

        I soooo agree with you on the coffee, too. Cheap coffee is DISGUSTING. Blech. Go for the organic - healthier and tastier.

        My hubby and I are working on a financial plan for our home currently. We are coming out of a tough season as a self-employed family. We are going to teach our kids the Dave Ramsey finanical planning for teens as well, and send them through a formal course. We wish someone would have taught us at an early age many of the principles you describe in your hub. Thank you!

        Voted up, useful & Interesting. I am sharing on my FB wall, and linking to my "Simple Ways to Save Money" hub.

      • AtHomeHeather profile image

        Heather 

        6 years ago from PA

        wonderful read! if it has to due with living frugally i am for it! i enjoyed reading that you do no use coupons for products you do not usually buy. i found myself in a terrible way using coupons for things we did not even need and cluttering our house up for a bit!

      • Robie Benve profile imageAUTHOR

        Robie Benve 

        6 years ago from Ohio

        Hi King, 5% cash back on purchases is great! I only get 1 or 2%... I may have to start reading those card offer that come in the mail. :)

        You are right, paying off my credit card every month can build some excellent credit, if your other finances are in good standing.

        Thanks for reading and taking the time to share your experience. :)

      • profile image

        theking2020 

        6 years ago

        Excellent article I used my credit cards only because I get 5% back on purchases, is either that or no money back using my bank account. I rather use the credit cards on that aspect. As soon as the bill comes pay it off, the credit remains good standing and I got to save some money, in top of that using coupons are extremely helpful.

      • Robie Benve profile imageAUTHOR

        Robie Benve 

        6 years ago from Ohio

        Kthix10, thanks for the positive comment, I'm happy to hear you agree with my loan philosophy.

        Good luck paying off that loan quickly, it's going to feel so good! :)

      • kthix10 profile image

        kthix10 

        6 years ago from IL

        Great hub, I think you nailed it on the head with the mortgage debt, we have student loan & the mortgage. We are quickly trying to pay down the student loan before our kids get anywhere near the college age

      • Robie Benve profile imageAUTHOR

        Robie Benve 

        6 years ago from Ohio

        Thank you Linda for taking the time to read and share you positive feedback. :)

      • lindacee profile image

        Linda Chechar 

        6 years ago from Arizona

        Super Hub with solid advice for everyone. Valuable lessons for a financially secure life. Thanks!

      • Robie Benve profile imageAUTHOR

        Robie Benve 

        6 years ago from Ohio

        Thank you donnaisabella, that's a wonderful compliment. I like to think of myself I'm a balanced person. And I'm glad you like my lifestyle. Blessings. :)

      • donnaisabella profile image

        Isabella Mukanda-Shamambo 

        6 years ago from Fort Myers

        Great tips and views, I love your way of saving and living, they make sense to me. Thanks so much for sharing, you are a very balanced person.

      • Robie Benve profile imageAUTHOR

        Robie Benve 

        6 years ago from Ohio

        Yay! I thought there would be a niche of people out there that can relate to my philosophies. Great to hear one of them it's you, Simone! :)

        Thanks!

      • Simone Smith profile image

        Simone Haruko Smith 

        6 years ago from San Francisco

        Robie Benve, you and I have nearly identical financial policies. What fun! I love how you've explained things. Hahaa, living BELOW one's means- that's a great way to put it... and a REALLY novel concept to most Americans, I imagine! Thanks for putting together the fabulous Hub.

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