Personal Finance: Are you living below your means?


When it comes to personal finance, there’s a constant ‘battle’ for most adults to resist the temptation to spend money. A lot of advertising, many stores, credit cards, good prices, new trends … all of these make parting with our money an ‘easier’ experience than ever. Resisting the urge is not easy for most of us, so responsible spending takes a lot of will and strength.

For many adults, getting to earn a good wage means they feel more ‘entitled’ to live ‘better’ and lifestyle inflation is not just a combination of words. I don’t think there are too many of us who haven’t noticed we started ‘needing’ more stuff, as our income went up.

Years ago, when I met my husband, he gave me a digital camera. It was one of these ‘point shooters’, a very cheap one, even if for me it was something really huge. I had a small wage (almost as much as the camera cost) and couldn’t believe that I get to own such an amazing ‘toy’. As time went by and my salary increased, I found out that I needed a better computer and then a car. The monthly payments were pretty big and my costs skyrocketed.

personal finance

In 2011, as we were in the US and I got myself a very good web design contract, my earnings increased again. Immediately the regular point and shoot cameras (had another one purchased few months before leaving the country) weren’t good for me anymore, so I was craving for a DSLR. Got myself a brand new Nikon 5100, two weeks after it was officially released. Together with a zoom lens, it cost me $1400, which is very much, compared to the hundred bucks my point and shoot cost.

At the end of last year it became clear to me that, while we’re not in debt and the earnings are OK, we’re both living beyond our means (or at least we spend money more than it would be healthy to do). The only good thing about us both is that we don’t change our gadgets every year, so, once we secured the ‘junk’ we needed (new laptops, DSLR cameras, a camcorder, tablet, some nice clothing etc.) we stopped buying more stuff or replacing the things that were still working properly.

When 2013 started, I gave myself the task for keeping track of our spending to understand our finances better. It wasn’t difficult for us to see where our money is going and being more responsible. It’s been a pretty hectic year, with a lot of exciting things happening to us (getting married, getting pregnant, having my husband start his own business, traveling etc.) and we were able to keep our head above the water, not spending too much, just enough to make it all work and still be able to save a little.

Now we’re living below our means, at least this is what I can infer from what others are saying. We have relatives or friends who are a bit amazed that we don’t eat out as much as we could, that we don’t buy new clothes at least 3 times a month, that we don’t have smartphones with expensive monthly plans. Being a web designer and blogger, many of my friends in the ‘industry’ expect me to be crazy about such devices and, when I show them my 5 year phone with no data plan the reply I usually get is “how come you don’t have a smartphone when you’re earning this much?”

Earning a decent income every month and splurging on stuff you don’t really need are two different things in my opinion. The fact my income is not that bad for the wages we have in my country doesn’t mean I’ll squander my hard earned money on useless junk. Sure, when it came to getting a new laptop (after my old one died on me), I immediately entered the store and got myself one of the best laptops I could find. This is my ‘bread-earner’. My phone is just to call/be called, so, as long as it still works, it will be used. When it comes to traveling, while we do make sure we don’t squander money, we still have a budget set each year.

We live below our means in certain aspects and still ‘invest’ money for the things that matter to us: health, travel, good healthy food, business etc. It allows us to save money, meet all our real needs and still enjoy life. While lifestyle inflation clearly hit us too, we try to minimize its bad influence and be more responsible with our money each month.

How about you? Are you living below your means? Where do you splurge? Where do you apply frugal strategies?


  1. I’m generally good about living below my means, but I go through “splurge periods”. For instance, right now I’m on vacation. Even though it’s a relatively cheap vacation, I’m unemployed, so any vacation is a splurge. I’m just not willing to give up EVERYTHING while my income is in flux.

    • If vacations are something important to you (as they are to us, too), then I don’t seen an issue. There should be things in life we don’t miss out on, while being more frugal in other areas 😉

  2. It can be really hard to keep that life inflation in check. It is worth it though because you get to enjoy you added income without just filling up your life with junk and still being broke.

    • It’s clearly not easy to not succumb to it. For many people it’s quite a struggle to still enjoy life and not go too much overboard, just cause they can ‘afford’ it.

  3. I think that the definition of “means” can be open to interpretation. It’s a blog post I’ve got coming, but I’d say living on less than one makes can still technically be living above means. So by this tougher standard, I’m not living too much below my means.

  4. Lifestyle inflation is very dangerous… especially if you ever experience a drop in income.

    I see how how it can be a temporary problem, but is it possible for it to be a long term issue? It would seem to me that if you are spending above your means you would run out of money and be forced to address the problem.

    • I think that, unless we make a conscious effort, we’re slowly being drawn to spending too much. In many cases the change came after we lost our income and had to re-asses our lifestyle. If this hadn’t happened, I’m sure I’d still be making most of the mistakes I used to.

    • Well, as time goes by and you’ll get into a better financial place, you could relax a bit, but you’ll also have the experience of not squandering your money. This should really help later in life 😉

  5. I would say I am sort of in the right place. I still overspend on things so that life is still enjoyable (mainly spending too much on technology) however we are saving in a lot of areas. Great article.

  6. We live below our means. I’d like to cut expenses but I find it difficult to sacrifice certain luxuries. I guess it’s all about striking the right balance and learning to splurge on things we value rather than spending because we can.

    • Yeah, cutting expenses in the areas you don’t really care too much about is the way to go. I don’t think I could live without indulging in some of the stuff I like anyway

  7. When you think about it, it’s silly not to spend money as you make more money. But instead, I think it’s important to pick and choose where you’re going to spend money. If you want a DLSR, a new TV and a new car, you can’t have all three and still live below your means. Pick one and consider yourself lucky 🙂

  8. Great read, and I agree with spending on meaningful things or experiences, rather than spending for the sake of it. I’m aiming to live below my means next year, so it’s nice to know bloggers are out there doing the same thing since it’s not really talked about in ‘real life.’

    • Many people in the ‘real’ life fall prey to all the ads and TV shows that showcase living beyond your means. And it’s a pity, since you can really enjoy life and not get into trouble for it.

  9. I think I live below my means. I’m pretty humble and not into fancy things like designer shoes and handbags. I like to save and only buy cheap things on sale. Where I splurge is travel but still nothing crazy. I still try to find cheap hotels and price hunt on flights.


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