Trying to make your money stretch a little further? You’re not alone.
Between rising everyday expenses and stagnant wages, it can feel impossible to keep up, let alone get ahead.
However, living within your means doesn’t have to mean giving up everything you enjoy and depriving yourself of fun. There are several ways you can save a little more each month.
With that in mind, here are 15 ways to live within your means and stop living paycheck-to-paycheck:
1. Perform a financial audit
Before you can address overspending, you need to understand where your money is going. You can do this by conducting a financial audit of all of your banking accounts, including credit cards.
Start by calculating your average monthly income, then review all of your transactions going back at least 90 days.
Lunch Money simplifies this process by automatically syncing all of your financial accounts and organizing your expenses for you. This saves you from having to comb through multiple bank and credit card accounts.
You can also view stats and trends about your spending, helping you quickly spot areas to cut back.
2. Create a values-based budget
Now that you know how much money’s coming in and going out, it’s time to create a monthly budget to control your spending.
Here’s a tip: build your budget around what you value. When your spending aligns with what matters most to you, it’s easier to stick to.
For example, if your dream is to travel, include a budget category specifically for that goal. It will help you stay motivated to cut back in other areas.
To make a value-based budget, list your priorities — whether it’s buying a home, saving for retirement, or starting a family — and build your budget around them.
3. Consider downsizing
Many people who live beyond their means spend too much money on major expenses, like housing and transportation. These are two areas where downsizing can make a huge impact.
Here are a couple of good rules of thumb:
- Try to keep your housing costs under 30% of your monthly pre-tax income, and lower if possible.
- Transportation (including your car payment, insurance, gas, etc.) should stay under 15% of your monthly pre-tax income.
The 50/30/20 budget rule can also help you gauge your overall spending. This guideline recommends that 50% of your income go to needs, 30% to wants, and 20% to savings.
These percentages may not be suitable for everyone (especially those in high-cost-of-living areas), but they can serve as a good starting point. The lower your shelter and transportation costs, the easier it will be to live within your means.
That might mean moving to a smaller place or a more affordable area (as long as it’s still safe!). And if you can avoid a car loan — even by switching to a well-maintained used vehicle — you’ll free up even more room in your budget.
4. Meal planning
Food is another expense that can really eat into your budget (see what I did there?).
If cooking at home feels overwhelming, meal planning and prepping can make a huge difference.
The simplest way to start is to pick one or two meals you enjoy, and cook a big batch so you have enough to microwave leftovers throughout the week. Think pastas, stir-frys, soups — anything that reheats well.
The key is to prep foods you actually want to eat. If you’re excited about what’s in the fridge, you’ll be less tempted to grab takeout.
5. Cut unnecessary memberships
Everybody and their grandmother has some kind of subscription now — from meal delivery services, streaming services, note-taking apps, you name it.
Individually, subscriptions seem pretty harmless — $5.99 here, $11.99 there — no big deal, right? But those small charges add up quickly and can consume a significant portion of your budget.
If you don’t use a subscription regularly, it’s usually best to just ditch it. You can also consider apps that require a one-time payment instead of an ongoing subscription. It might cost more upfront, but at least you aren’t locked into paying forever.
6. Take advantage of cash-back rewards programs
Another great way to stretch your budget further is to use a cashback or rewards program.
Tools like Rakuten, Capital One Shopping, and Upside can help you find exclusive coupons or earn cash back on your purchases.
Credit card rewards can also be lucrative if you use them wisely. Many offer free flights, hotels, or cash back once you hit a certain spending threshold.
Just remember two important rules:
- Always pay off your card in full each month.
- Only charge what you were already going to buy.
When used responsibly, these rewards can help you save more without changing your spending habits.
7. Automate
Automation makes managing your money a breeze. It’s actually one of the best pieces of personal finance advice out there because it removes the temptation to spend money you need to save.
Start by setting up auto-pay for your bills. This helps you avoid late fees and takes away the stress of worrying about due dates.
Most banks also allow you to schedule automatic transfers from your paycheck to savings, so you can pay yourself first. You can even create an account for each of your savings goals (e.g., travel, holiday gifts, a new car, etc.) to help you stay organized.
8. Buy nothing (spending freeze)
One of the most effective ways to live within your means is to spend as little as possible.
The Buy Nothing movement is a great place to start. It encourages people to give (and receive) items within their local community. The goal is to reduce waste, consume less, and support one another.
Look for a “Buy Nothing” group on Facebook or Reddit near you. Once you join, you can either post items to give away or request things you need, like toys, clothes, or even furniture.
9. Free things
Everybody loves free stuff — and there’s more out there than you think!
Start by checking local community events, including free festivals, concerts, or movie nights.
Your local library is another underrated gem. Beyond books, it might have movies, TV shows, audiobooks, music, and workshops or online courses.
And don’t forget about birthday freebies! Some businesses may offer a free treat, discount, or even a full meal on your birthday.
10. Negotiate
Did you know you could negotiate your bills?
If you call your phone or internet provider and tell them a competitor offered you a better rate, they might match it!
It’s also a good idea to shop for car insurance at least once per year. It could save you hundreds if you find a better deal.
Don’t be afraid to negotiate other large purchases, such as furniture, appliances, or vehicles. Many companies offer price matching if you find an item cheaper elsewhere.
11. The 24-hour rule
Have you ever bought something from Amazon, only to regret it later? Impulse buying can wreak havoc on your budget if you’re not careful.
Luckily, there’s a simple way to avoid this: set a rule that you have to wait 24 hours or more before buying an item over a certain amount, for example, $50.
That gives you enough time to sleep on it, discuss it with your partner, and consider whether you really need it. Additionally, it allows you time to explore other options, such as finding it cheaper elsewhere or purchasing it used.
You might even decide you don’t need the item at all. Simple, smart spending habits like this could save you hundreds of dollars over time.
12. Increase your income
If you’re struggling to live within your means, even after slashing your expenses, you may need to increase your income.
That could mean taking on more hours at work, asking for a raise, or switching to a new job or industry. You may also consider taking on a part-time job on your days off.
And, of course, there are plenty of side hustles you can try. Some people drive for Uber or DoorDash, while others sell homemade goods on Etsy or flip items on Facebook Marketplace.
Bringing in a little extra income, even temporarily, can help you get ahead financially.
13. No spend challenge
If you’re looking for fun ways to live within your means, you might try a no-spend challenge.
Basically, you choose a timeframe (such as a week or a month) and commit to not spending money on anything non-essential, like fast food or clothes from Shein. Essentials like rent, groceries, and gas are allowed, but try to cover these expenses before the challenge starts (it will help you avoid temptation).
Not only does a no-spend challenge save you money, but it can also reset your spending habits (it’s also a fun activity if you’re budgeting as a couple!).
14. Build fun into your budget
You don’t have to cut out fun to live below your means. In fact, making room for what you enjoy can actually help you stick to your budget better.
Start by choosing a monthly amount that fits within your budget, taking into account your expenses and savings goals. Then, give yourself full permission to spend that money on whatever makes you happy throughout the month — whether that’s takeout, a video game, or a new pair of shoes.
Once you build fun into your budget, you can enjoy it guilt-free. You won’t feel deprived, and it’ll be easier to stick to the good money habits you’ve established.
15. Reverse budgeting
Reverse budgeting means saving first, then spending the rest. So, when your paycheck arrives, send the amount you want to save directly to savings (this is where automation comes in handy, as we discussed earlier!).
Paying yourself first is also an effective debt reduction strategy, since you can put money toward any credit cards or loans as well.
This budgeting method forces you to prioritize your goals above anything else. And, with Lunch Money, you can create savings buckets to track your progress.
Additional tips from Reddit
Here are some other smart spending habits Reddit users suggested on a post about how to live below your means:
- DIY repairs: One Reddit user, u/Distributor127, recommends DIY to save on everyday costs. For example, you could learn how to change the oil in your car, create your own home decor, or handcraft gifts for birthdays and holidays.
- Go car-free: According to u/casapulapula, going car-free was a big step they took toward living below their means. Cars are expensive, so walking, biking, or taking public transportation can save you a significant amount of money (if it’s feasible in your area).
- Find a new hobby: A lot of people like to shop when they’re bored, which can lead to overspending. u/harrison_wintergreen suggested picking up another hobby to avoid shopping as a form of entertainment.
- Simplify your wardrobe: Have you ever noticed Steve Jobs always wore jeans and a black shirt? u/casapulapula shared that simplifying your closet could lower your clothing expenses and help you live below your means.
Summary
There are tons of ways to live within your means — it just takes a little creativity. You might need to downsize your lifestyle, cook at home more often, or take on a side hustle to earn some extra cash.
Whatever approach you take, don’t forget to leave some money for fun. That way, you can still enjoy life while working toward your goals.
Do you want help with your budget, reducing your spending, or saving more? Try out Lunch Money free for 30 days and see how easy it can be.
