5 Personal Finance Podcasts Every British Woman Should Hear This Year

Why Living Below Your Means Is the Fastest Way to Financial Independence

Let’s be honest — living below your means doesn’t sound sexy. It sounds like your grandma’s financial advice, right up there with “turn off the lights” and “reuse that aluminum foil.” But here’s the kicker: it works. And if you’re aiming for financial independence — that sweet, liberating place where money no longer dictates your day-to-day — then this is your express ticket.

Hi, I’m Rachel Simmons. Some know me as a personal finance coach, others as “the relentless spreadsheet lady,” but either way, I’m here to make your money work for you. And today, I want to tell you why living below your means isn’t just a frugal trend — it’s the foundational strategy of every financially independent person I know. And spoiler alert: it won’t kill your joy.

What It Actually Means to Live Below Your Means

Let’s clear something up. Living below your means doesn’t mean eating instant noodles until retirement or giving up your favorite latte. It means:

• Spending less than you earn — consistently.
• Prioritizing what truly matters to you and trimming the rest.
• Redirecting the surplus into savings, investments, and freedom.

It’s not deprivation. It’s intentionality. When you decide what’s worth your money (and what’s not), you take control of your finances instead of letting your finances control you.

Why It Works: The Math and the Mindset

Let’s talk numbers, because numbers don’t lie — even when our spending habits do.

The Power of the Savings Rate

Say you’re earning $5,000 a month after taxes. If you spend $4,900, you’re saving $100. You’re technically “not living beyond your means,” but you’re also not accelerating toward any meaningful financial milestones.

Now, cut that spending to $3,000/month. Suddenly, you’ve got $2,000 to work with. That 40% savings rate? That’s the real MVP. Compound it over time, invest it wisely, and you’re not just saving — you’re building wealth.

The Time-Freedom Equation

Every dollar you don’t spend today buys you time tomorrow. Financial independence isn’t about a yacht or a five-bedroom house. It’s about being able to say “no” to what drains you and “yes” to what fuels you. Living below your means increases your savings rate, which shortens your time to freedom. The less you need to live on, the sooner your investments will cover it. Boom. Independence.

Rachel’s 5 Rules for Living Below Your Means (Without Hating Your Life)

I’ve coached dozens of people to financial independence — without making them live in a cave. Here’s how you can do it too:

1. Create a Values-Based Budget
   If your budget feels like punishment, you’re doing it wrong. Budget according to your values. Love travel? Budget for it. Don’t care about clothes? Slash that line. This isn’t about cutting joy — it’s about cutting what doesn’t serve you.
2. Automate, Then Walk Away
   Automate savings and investments as if they were non-negotiable bills. If you wait until the end of the month to save “what’s left,” you’ll save nothing. Pay yourself first, always.
3. Audit Your Subscriptions Quarterly
   Yes, even that $4.99/month meditation app you never use anymore. Subscriptions are financial slow leaks. Audit them every few months and ditch what’s not pulling its weight.
4. Increase Income Strategically
   Living below your means doesn’t mean staying broke. A side hustle, skill upgrade, or job switch can increase your income — just be sure not to inflate your lifestyle right alongside it.
5. Track Progress Like a Boss
   Use tools like FinanceOne‘s savings tracker or investment calculators. Tracking builds momentum. Momentum builds success.

The Lifestyle Payoff of Living Below Your Means

Contrary to what social media says, you don’t have to spend like a celebrity to live a fulfilling life. In fact, studies show that those who spend intentionally — not excessively — experience higher levels of happiness and lower stress.

Some benefits our community members have reported from adopting this mindset:

• Freedom to pursue passion projects without financial panic
• Improved relationships (less money stress = fewer fights!)
• Better health due to reduced anxiety and burnout
• Earlier retirement or semi-retirement on their own terms

And yes — still enjoying dinners out, spontaneous trips, and the occasional splurge. Because that’s the point: money serves YOU, not the other way around.

Common Myths Debunked

“But Living Below Your Means Is Boring”

If “boring” means saying goodbye to paycheck-to-paycheck stress, credit card regret, and soul-sucking jobs — sign me up. Most of what’s marketed as “fun” is just expensive distraction. Real fun is optional work, flexible travel, and peace of mind.

“I Don’t Make Enough to Live Below My Means”

I’ve seen people making less than $40K a year save $10K by getting clear, conscious, and creative. It’s not always easy — but it’s always possible to make even small changes that have big results over time.

“I’ll Start When I Make More”

If you don’t manage $3,000 wisely, you won’t manage $10,000 either. Habits scale. Cultivate the discipline and strategy now, and when you do level up financially, you’ll be unstoppable.

So, Where Do You Start?

Start by tracking one month of your expenses. Every penny. You might be surprised to see where your money quietly disappears. Then, identify your “non-negotiable joys” and your “auto-pilot spending.” Cut the latter, protect the former.

Make space between what you earn and what you spend — and send that space straight into your freedom fund. Whether it’s retirement, travel, or starting your own business, that surplus is the fuel.

Final Thoughts: Choose Intentionality, Not Deprivation

I’ll leave you with this: financial independence isn’t built on earning a million bucks overnight. It’s built on a hundred small choices made consistently — especially the unsexy ones like living below your means.

But the reward? It’s beyond worth it. It’s time, freedom, choices, and peace of mind. That sounds pretty sexy to me.

Need help figuring out what living below your means could look like for you? Reach out here. You don’t have to figure it out alone.

To your future freedom,

Rachel Simmons
Editor, Personal Investing & Financial Independence – FinanceOne