How and why to live below your means
“We buy things we don’t need with money we don’t have to impress people we don’t like.”
— Robert Quillen
We live in a world of overconsumption.
Everyone wants to sell us something.
We’re like a walking dollar sign to them.
The definition of advertising is:
- Persuade people to believe they want something they don’t need.
We measure our worth with the things we own.
The things we own end up owning us.
The lose-lose equation
We are manipulated to want things + We have to work for money
- We are taught to measure our worth in the things we have.
- We feel incomplete if we don’t buy stuff.
- Immediately after a purchase, we feel better, but the craving to buy more comes back. We feel incomplete once again.
- We exchange our lives and our time (a finite resource) for money.
- We’re preoccupied with how to make more money and how to monetise everything.
- Jobs kill us slowly by eating our time and stressing us.
The endless capitalist hamster-wheel:
→ We want things which cost money.
→ We have to work to make money.
→ We buy things with money.
We enter an endless race.
Money is the modern way of enslavement.
But only if you let it.
Why live below your means
- You have more money. This gives you the freedom to:
- Say no to things you don’t want to do.
- Change careers and unfulfilling jobs fast.
- The less you own, the less you’re affected by disaster.
- You sleep better, and you are less stressed.
- You avoid stupid status games.
- Money in the bank enables you to seize opportunities when they appear.
- You don’t make compromises. You keep your integrity and artistic freedom.
How to live below your means
- Keep you day job. Don’t quit yet.
- Track your monthly expenses.
- Spend less money than your salary.
- Save twelve months of expenses. This is for your peace of mind. Don’t touch this money.
How to spend less money
1. Optimise your housing. Move in with friends, colleagues, parents. Find cheaper rent in the city outskirts or move to a cheaper country.
2. Limit big purchases like cars, TVs, laptops, phones, and watches. Is it necessary? Can you borrow it? If its value depreciates, it’s a liability, not an asset.
3. If you have any debt, pay it off ASAP.
4. Learn how to cook. Home-made food tastes better. The same goes for cocktails.
5. Buy only the things you need. Before purchasing, wait twenty-four hours and after, decide if you still need the item. Buy unbranded clothes or go thrift shopping. Buy items in bulk. Buy produce from the farmer’s market.
6. If you use it daily, buy the best. For everything else, buy the second cheapest.
7. Mind your friends. There’s no keeping up with the Joneses if there are no Joneses. Who are you comparing yourself with? Online, you compare yourself with four billion people. Our brains can handle only about one hundred fifty people 1.
More tips
- Shop for groceries only after you’ve eaten.
- Install ad-blockers. Less ads = less manipulation.
- Go into debt only for a house. Instead of borrowing, save up for other purchases.
- Prevent hedonic adaptation 2. To not get used to it, stop doing it for some time.
- Use points and loyalty schemes.
- Install a carbon filter on your tap so you don’t have to buy and carry potable water.
- Measure your worth by what you create, not by what you buy.
- Occasionally splurge. Buy yourself something nice—you’re not a robot!
- The most difficult: work on yourself to want less stuff. Read stoic philosophy. Think about losing the things you already have.
Pitfalls to avoid
- Timing is important. Living like a bum to save money in your twenties is fine. In your fifties, it’s weird.
- More money = More freedom up to a point when money begins owning you.
- Avoid being penny wise and dollar foolish. Big or frequent purchases can devour your penny savings.
- What you do repeatedly adds up. Starbucks twice daily? Save money by brewing coffee at home. Are you going out a lot? Save money by ordering soda water with lime. Are you addicted to buying watches, bikes, and guitars? Make a rule to sell your gear before you buy another.
- Remember it’s a two-sided coin: Reduce consumption + Increase production (money in). The best way to earn is with your mind, not with your time.
You need much less than you think to be happy.
Don’t buy into their bullshit.
Reduce your consumption—it makes you Antifragile.
“He who knows that enough is enough will always have enough.”
— Lao Tzu
Live below your means.
In a nutshell (TL;DR)
Escape modern enslavement by living below your means. You’ll have more money, more freedom, won’t be affected by disaster, and less stress. How?
- Track your expenses.
- Spend less than you bring in.
- Save twelve months’ expenses.
Dunbar’s number suggests people can keep a maximum of one-hundred-fifty stable social relationships.↩︎
Hedonic adaptation is a tendency of people to quickly return to their previous level of happiness (set point), despite major positive or negative events.↩︎