Golden Icons Lifestyle Tips: How to Strategically Live Within Your Means Blog

Golden Icons Lifestyle Tips: How to Strategically Live Within Your Means


My first lesson after moving to the United States was learning how to curtail my spending. I purposely brought very few clothes and shoes to the US, because I knew I would easily acquire these material possessions. Within a few months, I had gotten so many outfits that I ran out of space in the walk-in wardrobe in my room and had to start using the guest room and almost every spare wardrobe in the house to hang my clothing. The amazing thing was that I do not wear most of these outfits. A lot of the clothes still have their price tags intact, and a number of the outfits have only been worn once. As one of my New Year’s resolutions, I decided to de-clutter my wardrobe and give away the things I hardly use, and as I was doing this, a huge sigh of relief was felt within my soul.

I wonder how many people in the United States are in my shoes, and even worse off. My situation was actually not that bad because I never bought anything that was above my means. I shop at the expensive stores only when they are having a sale, and I am always looking out for shops where I can get great deals. But for millions of people, it’s a different story. People tend to live above their means and use credit cards to buttress this weakness. There is another category of people who have cultivated bad spending habits because of a self-image problem and the need to fan their ego. They want to be seen as driving the best cars, living in the biggest homes, and wearing the most expensive jewelries. As a result, they work overtime and fail to enjoy the necessary balance between healthy living, rest and work.

A friend of mine once told me of a young unmarried lady who lives in a mansion in the U.S. This lady works as a medical professional, lives in a beautiful house, but has a mortgage that is bigger than her. In order to keep up with her bills, she works three shifts and goes to work every day of the week, while spending very little time in the house that takes a bulk chunk of her income. As my friend was narrating this story to me, I just thought to myself, “Is this life? Is all the overtime hours worth it?” Personally, I do not think so, but others might have a different opinion. Choosing to live within your means is synonymous with placing yourself in a situation where you are at peace with yourself. I consider cutting your coat according to your size one of the virtues everyone– whether female or male, young or old, educated or illiterate– must acquire in order to truly enjoy a happy and blissful life.

Living within your means starts by understanding what wealth is, identifying your income sources, creating a financial budget and establishing ways of spending less and saving more. What does it mean to live within one’s means? How can one establish a budget and stick to it? What does it mean to shop smart? How can one cultivate a habit of thinking before spending? How can one save more money and reduce routine expenses by implementing a cost cutting strategy? The answers to these questions and other ways of improving our current attitude towards spending and living within a defined financial plan are discussed in this article.

Redefinition of affluence and success. One of the fundamental requirements to establishing a strategy for living within one’s means and improving spending habits is to have a paradigm shift on the definition of riches. One individual may attribute having tens of cars and houses as success, while another may be content with a beautiful home, functional car, ability to effortlessly pay one’s bills, enjoy a vacation, make reasonable investments, generously give to others and, most importantly, enjoy a happy family. Without coming to terms with this basic definition, it will be difficult to move ahead in this regard. An individual that must live within his or her means must be reasonable, and so must his outlook on wealth, possessions and prosperity. Once an individual gets this right, then reviewing his sources of income and establishment of a financial plan should be the next logical step.

Determine your “means” and establish a financial plan. In order to determine where you are heading, you definitely must know where you are coming from, which is a reason I advocate that individuals seeking to wisely manage their finances must first and foremost analyze all avenues of income. After this has been done, then a financial plan should be established to channel how this income will be managed and intelligently put to use. The financial plan can be a budget that outlines the way current and future income will be spent. This plan should include allocation of money for routine expenses and investments. As an individual trying to live within one’s means, discipline must also be a watch word. The amount set aside for each expense should be used for that sole purpose– although some flexibility can be considered– but this must be well justified. Once a budget is in place, we must ensure we remain accountable to what we are spending on and perform a routine review to ensure we are not going over the budget.

Spending cash as much as possible. Another method that can help you to live within your means is spending more cash and limiting the use of credit cards. Spending cash also helps in saving a few dollars on interest charges that comes with the use of credit cards. The logic to this is that you cannot spend what you don’t have. I do not advocate carrying cash around, because if it gets lost, there would be no refund, which is different with cards, as you can easily call the issuing company who can deactivate it and reissue another one. However, my advice is to have a shopping list, stop at an ATM, and get the required cash before doing your shopping. This will not only help in inculcating financial discipline but also ensuring a level of spending that corresponds to the targeted budget is maintained.

Research before buying anything. I recently realized that a lot of money can be saved by doing a simple search on “Google” before buying an item. In the past, I was so lazy to compare prices before buying anything and I would just get whatever I needed from the closest store to either my home or place of work. One day, my manager at work mentioned that she always does an online price comparison before buying major items; and I said to myself, maybe I should do the same for the new deep freezer I was planning to buy. I had thought Walmart was going to have the best price, but after reviewing the various prices at Conn’s, Home Depot, Sears and Lowes, I realized Home Depot was having a sale, and I got a brand that was very good, which also came with free shipping…and so, I saved money and it was delivered and set up at my home without any inconvenience.

Cut down cost of routine expenses. There are various ways of cutting down expenses. These include reducing unnecessary add-ons to telephone services, turning off unused lights and electronics, and buying and stocking your freezer with items your regularly use when they are on sale. A friend of mine loves T-bone steak and she told me she always waits to buy as much as possible from Randalls whenever they are having a sale. I think that’s a smart way of saving a few dollars and avoiding a routine visit to the grocery store for a particular item. Another quick example is taking your lunch to work. I realized a savings of over two thousand dollars at an average of $10 per lunch when I decided to start taking my lunch to work. Not only was I saving some money, but I was also able to eat healthier. Also, instead of buying snacks from the vending machine, I buy these in bulk at Sam’s Club and keep them by my desk at work. However, I try to maintain a high level of discipline in order to avoid overeating as a result of close proximity to the snacks.

Shopping smart. The focus of shopping smart is to always look for bargains and cheaper ways of buying the same brand and quality at a lower price. This can easily be achieved by utilizing coupons, purchasing items during sales, and comparing prices at a number of stores before making purchases. I was a frequent WalMart shopper because I thought everything was always cheap out there. But I have realized that certain things are way cheaper at other grocery stores when they are having a sale, and I try to maximize such times for purchasing those items in bulk at the other stores.

Stop trying to impress people. One other reason that prevents people from cutting their coats according to their size is because they want to appear as being successful in front of their friends and colleagues. They acquire what they ordinarily cannot afford in a bid to impress others. Some people actually create an internal competition for themselves and would rather borrow and/or max out their credit cards in order to be in a status they do not belong to. I believe people who think like this lack self esteem, and unless they have a change of attitude, they will keep chasing shadows, because the need to always impress others would prevent them from having satisfaction with whatever they have, and the race for such people would be an endless one, and most often than not, they will hardly find inner peace.

Paying your bills on time. Everyone should maintain a schedule to help ensure that all bills are paid on time. This greatly helps in saving a few dollars that the companies charge for late payments and reconnection fees. We once forgot to pay our water bill and for some reason did not see the various warning disconnection notices sent to us. The water company disconnected our water supply and we had to pay $150 to have it reconnected. That was a painful way of losing money that could have been saved or used for other tangible things, but we learned our lesson thereby.

Don’t buy what you cannot pay for. Everything about living within your means revolves around this principle: “never buy what you cannot pay for.” Anyone who can absorb this mindset and practice it on a daily basis is definitely on the right track to financial freedom. The problem with most individuals living above their means is an outcome of this habit, in which they try to obtain either what they do not need, or what they cannot pay for. Consequently, they resort to spending with credit cards or borrowing in order to ensure they acquire these most-often-than-not non-essential wants. Also, maintaining a shopping list before setting out to the store or mall and sticking to it can greatly help individuals trying to curtail their spending and live within a budget.

These are general ways of strategically planning our spending in order to ensure we live within our means and eventually achieve financial freedom. We should also have at the back of our minds that as we try to shop smart and curtail our spending, the aggregated amount saved here and there should be further invested for the future.

Culled from a previous article published in the Golden Icons Magazine.

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