Should You Live Below Your Means?

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You can lead a horse to water, but you can’t make it drink.

That one simple statement accurately reflects the way most people react when someone gives them advice on something – they don’t listen to it or follow it.

It’s a reflection of our flawed human nature. Most think they’ve got everything figured out in life, even when they don’t. And being open to the opinions of others often means admitting that you might actually be wrong. Who wants to do that?

I know I’ve certainly been guilty of brushing off the opinions of others when I should have been listening, especially when those opinions came from people who were older and wiser. But hey, hindsight is always 20/20, right?

There have been times over the years, however, when I was given advice so profound, something that I had never really thought of or considered before, that it totally stopped me in my tracks as I pondered its deeper meaning. That happened to me a few years ago, and to this day I consider it the best financial advice I ever received. That advice is…

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Always Live Beneath Your Means

On the surface it seems so simple, yet how many actually live by this maxim? Too few. Nearly half of all Americans live paycheck-to-paycheck. And this figure isn’t just made up of the poor; it includes those in the middle class, too. But here’s the crazy thing – there are also plenty of millionaires who live paycheck-to-paycheck.

Instead of being content with what they have and enjoying a cushy financial safety net, many just end up spending more when they make more money. Maybe they trade in their Honda for a luxury brand when they get a promotion at work. Or perhaps they move out of their condo into a starter castle in a swanky neighborhood.

For many, more money equals more stuff.

The guy who said to always live beneath your means? He’s a millionaire. He lives in a nice house, but it’s not a castle. He has it completely paid for, too. And not only that, but his vehicle is so ordinary you wouldn’t even pay any attention to him if he passed you on the highway. Just another guy in a hurry, you’d think.

This guy has learned the secret to true wealth. It has nothing to do with how much you earn or how big your bank account is. Rather, it has everything to do with being content with what you already have. That’s the real secret to being rich. It means not going deep in debt for things you don’t need.

Why You Should Always Live Beneath Your Means

Living a frugal lifestyle that is comfortably beneath your earnings isn’t just about avoiding debt, although that alone would be reason enough to do it. There are many reasons to consider adopting the lifestyle.

You’ll Have Less Stress

If you have to go deep in debt to buy a big house, fancy car, and other stuff you don’t really need, you’ll just end up dealing with a mountain of stress as you work to pay off the debt.

Sadly, when many pay off their car payments or home loans, they often see it as a reason to trade their vehicles for new ones or buy bigger homes. This just continues the never-ending cycle of debt in their lives.

Living beneath your means allows you to dramatically lower the stress in your life. It means not having to work as hard to pay down your debt. It may even allow you to work a different job that you enjoy much more (but pays less) than the crummy soulless job you’re currently in.

It Allows You to Build an Emergency Fund

Having an emergency fund in your bank account for unexpected expenses is very important. But it’s kind of hard to save money when you are living above your means.

Living a frugal life allows you to squirrel away a little money each month to make sure you have a financial cushion to protect you in case something happens. Having an emergency fund decreases your stress when these inevitable expenses happen.

It Allows You to Build Wealth

If you always trade in your car whenever you get it paid off, you never really get to enjoy being an owner. You and the bank own it. Same thing with your home. If you suddenly decide it’s time to upgrade to something bigger and better when you make your last mortgage payment, you’ll always be in debt.

There’s something to be said for having a home that the bank doesn’t have any claim on – a home that’s all yours. Not having to make an expensive monthly mortgage payment is the same as giving yourself a big raise. That’s extra money you can use for other things.

It Allows You to Save for Retirement

There are some who question whether Social Security will still be in existence when they retire. It’s a scary thought, but many may have to rely on their retirement savings to survive in their golden years. It’s either that or work as a greeter at the local big box store.

Living beneath your means gives you the ability to save for retirement. It lets you put a little money in your personal 401(k) retirement account each month so the magic of compounding interest can do its thing as the years pass. The earlier in life you start saving for retirement, the better off you’ll be.

It Allows You to Give Generously

Living beneath your means allows you to give money to organizations and causes that you care about and believe in. But it doesn’t always have to be about giving money. It can also be about giving your time.

If you have to work long hours to keep your head above the financial waters, you won’t have much time to do any volunteer work. You’ll be too tired.

Volunteering with charity organizations is deeply fulfilling. Knowing the work you do for these organizations is changing lives and helping those in need is very personally satisfying and rewarding.

It Allows You to Live Life on Your Terms

Living a frugal lifestyle gives you an incredible amount of freedom. It lets you do many things in life that others could only dream of.

Perhaps you would like to travel more or start your own business. Maybe you would like to transition from working for someone else to working from home as a freelancer.

Whatever your goals in life are, living a simple life gives you the freedom to make them happen without having to worry about making enough money to pay for all of your stuff.

Living the Good Life

There’s so much more to living well than the accumulation of material possessions. To be truly rich means having control over your life, your time, and your schedule. It means living a life that is as free of stress as humanly possible.

That’s what real wealth looks like.


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About the author

Cyrus Vanover
Cyrus Vanover is a freelance business writer who helps marketing managers position their companies for success. Based in Virginia, he enjoys hiking the local trails, exploring new restaurants, and live theater when not writing.


  1. Not keeping up with the Joneses aka living below my means has been the best method for increasing my net worth. There’s no magic pill, just spend less than you earn! The less, the better!


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