LBYM: Live Below Your Means

“Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty-pound ought and six, result misery.”

-Charles Dickens

Living below your means or (LBYM) is not a sexy headline. It is safe to say it is pretty much the opposite of sexy. However, it is one of the most fundamental and most important concepts to grasp in personal finance. If you ran a business and consistently showed expenses that were greater then income month after month you would eventually run that business into the ground. No one that is rational would keep a business like this running because it would be costing them money every month. The same thought process should be applied to your personal finances, this is obviously easier said than done.

Why do NFL players with successful careers end up broke? Why do famous actors like Johnny Depp get into financial trouble? It is because they do not live below their means. LBYM is a lifelong skill, no matter how much money you have this needs to be applied. If you are just starting out and have a low-income IT WILL BE TIGHT but you can still LBYM it just requires sacrifice. Obviously, someone like Johnny Depp is spending multiples more than your average Joe but nonetheless the math works all the same. Spend more than you earn and you will get yourself into trouble.

So, what are some ways that you can become a lifelong learner of LBYM?

Keep living like a college student.

Don’t worry if you didn’t go to college you aren’t excluded from this group! The name of the game is to live like you are still broke even if you have started making a good income. Do this until it is painful and then S-L-O-W-L-Y adjust your lifestyle up when you are well on your feet. It is so easy to go out and buy a nice car or rent an expensive apartment and say things to yourself like “I deserve this”, but, you don’t!

Times are not that tough in modern society you have everything you need in America on a basic income, the luxuries of life can come later. Instead do yourself a favor and establish a strong foundation by living like a college student and banking the difference. You can always scale your lifestyle up but once you creep upwards it’s hard to go back to that Honda civic.

Establish a budget based on your current income.

This one is so key but today it seems like less and less people care. It is finance 101 to sit down with a big cup of coffee look at your bank statement and all your bills and see how much you are spending. Without knowing this you are truly in the dark. There are many resources out there like YNAB that you can use to help you get started. Personally, I try to focus on the biggest expenses of life where you can get the most bang for your buck, think housing and cars and then I move down to the smaller categories. What works for me may not work for you but whatever you do it is important that you care educate yourself about budgeting. Otherwise you will feel like a dog chasing your own tail.

Realize that it will get easier.

This is something that I think is hard to see when you are getting started. It can be so discouraging when you are getting on your feet. It feels like you are busting your butt and barely moving the needle but the amazing thing is that once you start to focus on it you will see changes, guaranteed. The same way money compounds from investments your good decisions will compound with your personal finance choices. You will become more educated about finance and will see ways to save money that you never paid attention to before. Don’t overlook this and try to stay positive and it will get easier.

Stop comparing yourself to others.

If you are on Facebook, Twitter, Instagram, Snapchat, LinkedIn, YouTube, Pinterest or any other social media site you are going to see the best of everyone’s world. Everything is rosy with a filter and a sunset, so tune out the noise and give yourself a break. If you know you are doing the best you can that is what you need to focus on not what other people are doing. Just because your Grandma mentions Joanne’s son or daughter is doing amazing doesn’t mean that you are not achieving anything! Stay focused on the road in front of you and keep making progress don’t get distracted by others.

Splurge on the things that matter the most to you.

When grinding through you will have tough times to face. One day you will wake up and have a healthy income and low expenses if you take advice from this site and other like-minded thinkers but until then it is a battle. You can’t constantly be in the trenches and sometimes you need a break, we are all human after all. If money is tight you will have to decide on what is most important to you. Is a vacation number one? Maybe it is healthier food and a gym membership to keep your sanity during long work weeks.

Whatever it is make sure you make time for it, it is important. If you don’t ever give yourself small wins you will become angry with your plan and most likely it will fail. Enjoy what you care about with a splurge here and there and then get back on track with your plan.

LBYM is not easy but anyone can do it and like many things in life it gets easier with time and practice. I can guarantee that if you choose to not LBYM you will not have excess cash to invest and therefore will always be feeling tired and left behind. So do yourself a favor and do whatever it takes to LBYM today and forever into the future, it will be well worth it!

What Are Your Thoughts?
  1. Do you think that our society lives below our means?
  2. How do you manage to have additional money left over at the end of the month?
  3. If you had a million dollar income and it was publicly known do you think it would be easier or harder to LBYM?


Spread The Wealth!

9 Comments on “LBYM: Live Below Your Means”

  1. Society definitely doesn’t live by its means – for the majority. I live under my means, and that’s how I am able to put away almost half my income – sometimes more into debt payments or savings. I’m very good at grocery shopping, we spend just under $400 a month for a family of four. I find ways of making the things I do want cheaper by DIYing or by finding a way to get it cheaper. Mostly I sleep though. Work overnights – sleep. That’s all I do.

    It would be easier for me if I had a million dollars because then I would buy a small house in the woods, live off the interest, and lay in my hammock. All. Day. Long.

    Thanks for the great article! I agree with Fred up there!

    1. Allie you will get there, it seems like you are very motivated. Very impressive living on a $400 a month grocery bill with a family of four. Honestly that one always amazes me. I am not sure if I am clueless or lazy in that category but food/groceries always seem to creep up there by the end of the month.

      What are some tips for keeping the costs low? Do you get fresh veg/fruits and decent quality meat at that price?

  2. “Stop Comparing Yourselves to Others”

    This is pure gold, Damn Millennial!

    We live in a society compelled to compare how we’re doing vs. how others are doing. And who do we normally compare ourselves to? All the people who are doing better than us.

    My wife and I have been blessed to visit many impoverished countries like Haiti and Panama several times. We’ve witnessed single moms living in slum villages, or even tents, with no economic means to improve their situation.

    And that’s who we choose to compare ourselves to. We realize our living room is bigger than their house. We notice that when we turn the faucet on, clean water comes out. And we definitely notice that we have a knob just for hot water. We have hot water readily available RIGHT IN OUR HOUSE!

    And this makes us realize we are exceptionally rich, even if most of our neighbors, family and friends probably think we’re struggling with money. (If only they knew!) But that’s ok.

    We compare ourselves to others. It’s human nature. But who we choose to compare ourselves to makes all the difference.

    Keep up the awesome writing Damn Millennial!

    1. Thanks LYW, I appreciate the comment. You are wise in the way you look at things. Isn’t it interesting that as you maybe accumulate a little more you look at the next person above you and think why don’t I have that. What a sad way to live. I have been trying to practice daily gratitude and I think it has made me a happier person.

      The same way you think of how amazing it is we have hot water I mindfully think of things I am grateful for during the day. This really has made a huge difference in my life and reminds me what is important.

  3. Great post DM! Definitely important to sit down and go over the budget you have available and see first hand what’s going in and out. I think a lot of people these days don’t bother looking at it because they know they won’t like what they see there.

    1. That is a fact! It can be a painful exercise for those just starting out. I just wish I could tell everyone that it gets easier and is worth the journey.

      Thanks for stopping by.