There are two ways to live life:
1. We can live in a way that we spend less than we make.
2. Or we can live in a way that spends more than we make.
I suppose you could argue there is a third way: Spend exactly the same amount as you make. And that may be true, but unexpected emergencies happen all the time. Spending exactly the same as you make only lasts until your next financial emergency—and then you’ll find yourself squarely in the second group.
It would seem, looking at the options, most people would choose the first. The stress of constantly living in debt, of constantly being held hostage to your past, of even living with a sense of fear or panic is a way of life that nobody desires.
Spending less than we make is the option people would rationally choose. But most of us don’t.
In fact, roughly 60% of us spend more than we make.
Here are the statistics:
60% of Americans could not pay for a $1,000 emergency expense.
77% of Americans report feeling anxious about their financial situation.
And the numbers are only getting worse.
Why is that? Why is a life with less stress and worry so difficult for so many of us to attain?
Why do most people choose to outspend their income?
There are some who will argue that the system is rigged and it is simply impossible to make enough money to live within your means. Of course that may be the reality for some, but it’s certainly not the reason for most. And most importantly, it’s likely not the reason for your choices.
More likely, the reason so many choose to live a life outspending their income is because messaging and marketers are constantly telling us that we’re missing out by not spending more money.
Consider this: you can’t turn anywhere inside a civilized society (nature may be the only exception) without being bombarded with advertisements promising a better life than you’re living… if, and only if, you are willing to spend to get it.
We’re promised a better life by spending more with almost every turn of our head.
The promise is so ingrained in our subconscious, from the moment we are born, that we subtly and unintentionally fall into the trap.
An increasing income doesn’t quench the desire. Offers for a better life only grow with our income… nicer cars, bigger houses, fancier meals, more luxurious vacations… the temptation to overspend never, ever ends.
The promise of a better life always lies just outside our current income. So we chase it, endlessly—always spending just a bit more than we have.
But it is better to live cheap under budget than to live luxuriously in debt.
Living within your means results in a self-satisfaction that cannot be purchased at a department store.
It results in a restful calm at the end of the day that can never be experienced at the fanciest hotel.
It results in a genuine self-confidence that can never be purchased on a clothing rack.
It results in an ever-present enjoyment that can not be duplicated with a fancy vacation.
It results in an example for your family that can never be purchased with self-help courses.
And it results in a life well-lived with fewer regrets.
The world will tell you spending more is the key to a better life.
But I can attest, it is better to live cheap under budget, than it is to live luxuriously in debt.
Jessie says
I love the link to the $25 baby onesie ? Clever
Natalya Jurpik says
Wonderful article!!! I’m subscribed to several frugal living YT channels and I learn how to live more frugally and save more and to be content.
I would love more articles like this as I do enjoy this topic!!
Thank you!!
Juliayn Coleman says
Hi, if you’d like to share the channels you like best about frugal living, I’d love to look at them! Thanks
Juliayn
Belina Villanueva says
Thank you for a steadfast reminder that all of us may choose not to succumb to advertisements and marketers providing too many choices. Your articles keep me on track of maintaining debt freedom.
Judy says
I agree with you 100%, Joshua! We can do this—- no excuses.
Abby says
Truth. We talked about how to spend money before we got married. We had similar values about what was important to buy and what was not.
I had loosely been budgeting with the envelope method where I would write what bills/when due so I made certain I had enough to cover them.
He did (and I shifted over) an allowance system where we would take out a set amount every Friday. It covered any meals out, movies, something we wanted, fun stuff – walking around spending money. He said that it helps you keep track of can I do this better than later looking at a bunch of ATM debits on a bank statement and not being able to remember where the money went. It also was much easier mentally that doing that endless tallying of spending 37 cents on a pack of gum detail. You open your wallet and the answer is a yes or no.
We continue to talk about upcoming big expenses and bills due. It may be just 5 minute conversation but we work to keep each other in the loop. Successful for us, for over 20 years (through several bouts of unemployment).
Jessalynn Jones says
I love this article Joshua! We stayed in a 400 square studio for 10 years for just this reason. We could have afforded more but it would have brought stress. Now we really could afford more but we are still living very simply and helping family out. People think that bigger and fancier is better and safer but I’ve learned that simplicity and flexibility is what really works! In the end, a home is a home, food is food, clothes are clothes, no matter the price tag. If we cultivate contentment and live simply we break free from debt and stress and the lies our consumer society is telling us.
Isabel says
Great article!
I own what I need and what I really love.
I have learned to know the difference between a like and a need.
I use my money to buy things that I really enjoy like traveling and helping people in need.
Jess Carroll says
I have borrowed money to pay down my debt and it feels good. I dont worry as much. I only do what i enjoy and that is going out to eat once in awhile. Also i enjoy music and go to concerts and buy cds.
Gabrielle says
Completely agree with this! Beautifully written. The things that bring me the most joy cannot be purchased: spending time with family, immersing myself in nature, savoring quiet moments at home, creating, learning, simply being. Thank you for sharing!
Tamera L Tignor says
In the words of George Strait “There’s a difference in living and living well”
Thank you for this article, I have been living well since 2017 when I learned that letting go of 95% of my household full of stuff I didn’t need or really want, freed me to live with 5% of things I actually need and use. I created my own paradise with the 5% and no longer feel pressured by society, marketers or anything else to live by their rules and suggestions, I live by my own and have enjoyed the last 4 years financially sound and living quite well.
James C Hendrickson says
Sooo I totally agree with this.
There are lots of opportunities to spend money and get into debt, but far less social emphasis on things we can do to reduce expenses or improve our incomes.
Mary Davis says
I would love to live under my budget, but I am 77, retired, and disabled. My Social Security chrck cannot keep up with the constant rise in prices. Some months, it is a decision to pay the minimum on all of my bills or not get all of my meds or cut back on groceries. How else can I make paying my bills less stressful?
Judy says
There are certainly food pantries in your area—- and if you don’t drive, volunteers would happily bring the scheduled groceries to you. That would take care of groceries—- there are many benefits and perks for seniors if you contact your local senior center.
Maria says
Hi Mary,
Have you looked into Senior Services that may be of assistance to you? I am in Northern California & we have a free Magazine called Golden Pages which is a Senior Resource Magazine. I know sometimes navigating the system can be difficult, but you can also look into something similar in your area. We can also call 211 for assistance to referrals over the phone and I am sure you should have something similar where you live.
There are agencies and volunteers out there to help Seniors like yourself. I wish you well.
Eve says
You need to get in touch with your local welfare office. EBT cards are available for you to buy grocers and Walmart will let you buy with that card and even deliver to your door in some areas. Amazon will too although that is just pantry things. Your insurance company may have a volunteer to take you to dr appointments. You should be getting your meds reasonably cheap through Medicare and Medicaid. Same delivers them to your door. There is help for your electric bill. Ask. There is help out there. Reach out.