21 Benefits of Living Below Your Means
Everybody dreams about being rich. They dream about living in the biggest house that they possibly can. They dream about having the best car that they possibly can get. They dream about showing off that richness. What if people actually dreamed of living below their means?
What Does “Living Below Your Means” Mean?
Living below your means refers to the practice of spending less money than you earn, and prioritizing saving and investing over excessive spending.
This may involve making sacrifices or choices to prioritize financial stability and security over immediate gratification or consumerism.
Benefits of Living Below Your Means
There are benefits to living below your means and these are the top 10 benefits of living below your means:
1. Fewer Taxes to Pay
If there is one thing that Americans dread doing every year, it is filling out taxes. Nobody likes filling out that dreaded 1040 form from the American Internal Revenue Service (IRS). When you leave below your means, you don’t have to dread it anymore. With less money to spend, there is fewer taxes to pay. You could get a new house and pay less than $6,000 a year in property taxes. Your dream of paying fewer taxes could come true with living below your means.
2. Less Stress
In America, people stress out about the Rat Race. The Rat Race in the States to trying to be rich and to have as many material goods as possible. With living below your means, you don’t have to worry about the Rat Race.
When you are an athlete and you want to win the championship, you train as much as possible and you worry about what is keeping you from being the best possible athlete. You don’t stress as much when you are trying to be the less the best. You can do less work and less effort to be less then the best. Having less stress is definitely one of the benefits of lcing below your means.
3. Prepare for Retirement
When you are leaving below your means, you could start saving for retirement. This is due to how compound interest works. With the extra money, you could contribute to an IRA, a 401(K) or other retirement accounts. You may regret at first giving to these retirement accounts, but you will be happy when your do retire. When you do retire, it will much easier to live on a fixed income as if you have gotten used to having a fixed income for many years.
4. Fewer Fees and Insurance
When you buy an expensive car, you have to pay many government fees. With a cheaper, more economically realistic car, you don’t have to pay as much in government fees. The annual renewal/car registration costs will be several hundred dollars less if you got an expensive car like Range Rover Sport HSE. The insurance costs will be much less with an economic car.
5. Be Prepared for Disaster
One of the reasons that you save money is to be prepared for emergencies. Most Americans don’t do this as a survey shows that 50% of Americans would not be able an unexpected $400 expense. You can put these savings in an emergency fund and when an emergency does happen, you will be ready for it.
6. Less To Budget
With less money, there is less keep to track of and it is easier to focus on. You can look for activities that you can do for free. You can look for work that you like to do and you can do it with people that you want to hang out with. By focusing on things that cost less and make you happy, you will find that your spending will become less on its own.
7. Less Maintenance to Do
When you have mansions and expensive cars, you have to hire many people to clean those things. With a cheap house and car, you can clean them all by yourself. It would be hard on your own to clean all those mansions and expensive cars. Some of those things in the mansions and cars could eventually break down. The more things that you buy, the more that you have to fix.
8. Have Cheap Food
In a rich American neighborhood, it could cost you $10 to 15 to ear a meal. In a cheaper American neighborhood, it could cost you $5 to $7 a mean. Paying half what you paid before could definitely be an advantage of living below your means.
9. Lesser Weight
When you leave below your means, you will be eating at cheaper restaurants with probably less portions while more expensive restaurants would probably have bigger portions. You will probably ear more at home with more nutritional meals. An unexpected benefit of living below your means would be losing some weight.
10. Prepared For A Raise or Rise (if you are British)
It might sound crazy, but you might actually end up in much worse shape after getting a raise. With a new raise, you might think that you can splurge and end up spending too much. You might end up erasing the advantage that you thought that you would get a raise. When you get a new raise, you should just continue to save money.
11. Ability to Save More
When you live below your means, you have more money to put towards savings goals, such as an emergency fund, retirement, or a down payment on a home.
12. More Financial Security
Living below your means can provide a sense of financial security because you’re not relying on a high income or high expenses to maintain your lifestyle.
13. Increased Freedom
When you’re not tied down to high expenses, you have more freedom to make choices about your career, lifestyle, and financial goals.
14. Better Credit Score
Living below your means can help you maintain a good credit score because you’re less likely to miss payments or carry a high debt-to-income ratio.
15. Ability to Invest
Living below your means can provide you with extra funds to invest in stocks, bonds, or other assets, which can help grow your wealth over time.
16. Reduced Environmental Impact
When you consume less, you have a smaller environmental footprint, which can be beneficial for the planet.
17. Improved Health
Living below your means can reduce stress, which can lead to better physical and mental health.
18. More Time for Hobbies
With these benefits of living below your means, you should find that leaving below your means is something that you should try.
19. Ability to Travel
When you’re not spending all your money on expensive purchases, you have more money to travel and explore new places.
20. More Charitable Giving
When you live below your means, you may have extra funds to donate to charitable causes that you care about.
21. More Opportunities for Personal Growth
Living below your means can challenge you to think creatively about how to live a fulfilling life without relying on material possessions or a high income, which can lead to personal growth and self-discovery.