How do I live on less money?

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Answered by: Hannah, An Expert in the Cutting Costs Category
Unless you are in line for a seat in a monarchy or the lucky winner of the lottery, it's likely that you've thought about how to live on less money. With today's tight economy it can feel like there are no more holes in your belt left to tighten. However, there are many creative ways to cut down on the costs of everyday living, some of which you may not have considered yet! There are a myriad of paths to cutting back consumption, finding cheaper or free alternatives, and sharing expenses with family, friends or your community.



The best place to start is by writing out a budget of your current spending. Calculating this by hand may seem like a daunting task, but there are many online applications that can do most of the work for you, such as Mint.com. Once you have a chart of your actual spending you can analyze what your necessities are and where you may be overspending. Your next step is to set goals for the coming month. Remember to set realistic goals or you will have trouble sticking with your plan. But if want to save as much as possible, you should identify what are your base necessities and hold a longterm goal of spending money on only those categories. Everyone's necessities are slightly different, but food and shelter are really the only things one needs to get by in life. That means that things like cable TV, alcohol, jewelry, and pets are extra luxuries that can be done away with. Unless these expenses help you earn money or the thought of living without them makes you want to kill yourself, try to live without them for a month. You may be surprised by how easy it is!

There are of course plenty of things we need in every day life that cannot be negotiated. You need a place to sleep for instance. Depending on your location and circumstances as single, married, parent or orphan, your options will differ. Think creatively of what you need in a home. Do you have 25 children who won't be safe unless they live in a McMansion? Does your husband refuse to live in a "dangerous" part of town? Sit him down and tell him sweetly, there is no such thing as a dangerous part of town. Every part of town is dangerous, especially the more expensive parts.



Now if you are really ready to live on less, it means giving up a bit of independence to share with your community. Live with roommates. Join a car share or split a car with neighbors. Borrow power tools, and lend your own out. This not only saves money but it builds trust. Instead of going to the gym, run around the neighborhood. Practice Tai-Chi in the park. Let your friends cut your hair. Throw potlucks instead of eating at fancy restaurants. Buy clothes at thrift stores. Use your five finger discount to get underpants from Wal-Mart. Replace your smart phone with a simple clamshell. Give up alcohol, give up coffee. Brew your own ice tea. Borrow books from the library. Steal movies from the internet instead of going to the theater. Or at least support local businesses by buying bootleg. Make art with your garbage. Sell it on the internet. The possibilities are endless.

Ultimately, living on less money is a matter of commitment, patience, and creativity. You will be sacrificing the convenience to which you may have become addicted, but you will be gaining a new independence from consumer culture, and perhaps even a new perspective on the world. You will see more clearly what is truly important to you, and that my friends, that is priceless.

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