How to Live on Less Money: 25+ Ideas to Live on Less & Enjoy it More

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Winning with money comes down to a simple formula. Wealth equals money earned minus money spent. It is about the money you keep after paying the bills that generates wealth. While it is possible to make more money, the unsung hero of wealth creation is learning how to live on less money. By living below your means, you’ll keep more money in your pocket to invest and generate future income. I’m sharing 25+ ideas to help you learn how to live on less money while still enjoying life along the way. 

Why Live on Less Money?

Now, if you’re here, you probably already know you want to live on less. But if not, here are a few great reasons to consider doing so:

  • Accelerate your path to becoming debt-free
  • Create flexibility for early retirement
  • Increase your passive income through investing more
  • Less “paycheck to paycheck” stress

No matter your reason for wanting to live on less, doing so can help create more financial security. With that said, let’s jump into some actionable ways to live on less money! 

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Cut Your Housing Costs

If you want to learn how to live on less money, I always recommend starting with the areas that will have the most significant impact. In general, these tend to be your fixed expenses – those for which you pay the same amount every month. Some examples are housing, transportation, and loan payments. 

Housing is the biggest expense category in most people’s budgets. If you are serious about living on less, consider paring back this expense. 

Some of the best ways to do so include:

  • Downsizing:  Downsizing your primary residence will result in lower mortgage payments, property taxes, and maintenance costs.
  • Rent vs. Buy:  Consider whether it makes more sense to rent vs. own your residence – after all the “extras,” renting sometimes makes more sense.
  • Identify Income Opportunities:  Find ways to turn your housing into an income generator; ideas include renting out a room, buying a duplex and renting out the other unit, or even turning your place into an Airbnb when you’re on vacation!

Lower Your Transportation Costs

The second biggest line item in most budgets is transportation. Transportation costs can sting. If you own a car, you may have a car payment, insurance, maintenance costs, gas, etc. When you add all these things up, you may be surprised by just how much your commute costs.

Luckily, there are ways to save on transportation. Some things to consider are:

  • Drive Used:  While new cars are very tempting, they’re a massive drain on your wallet. Driving used can save you a fortune no matter how much you make. I purchased my car used. And guess what? It’s still an extremely nice car. In fact, I can afford to drive a nicer car because I bought it used than if I had bought something less nice brand new!
  • Get a Cheaper Car:  If a car payment is draining your budget, consider getting a cheaper car. Sell your current car, pay off the loan, and then buy a more affordable vehicle for which you’ll have no payment.  
  • Drive a Smaller Car:  Big car = big gas bill. Consider swapping out your SUV for a sedan. The truth is, not as many people need SUVs as they think. 
  • Get Rid of a Car:  Do you and your family have two cars? With so many people working from home these days, consider downsizing your family from two vehicles to one. And if you really want to save, consider going car-free and using public transit instead! While this is typically only an option in bigger cities, think about if it’s possible for your situation. 
Car Keys

Reduce Your Cost of Debt

If you have student loans, credit card debt, etc., it may feel hard to get ahead. However, you can do things to spend less money on debt service. Specifically, I am talking about refinancing your debt.

Perhaps the most straightforward debt to refinance is student loans. It is possible to refinance these loans in a matter of days, and you can do it 100% online. I recommend using Splash for student loan refinancing. They search a ton of different lenders to get you the best rate – everyone I know who has used them for student loan refinancing has been thrilled with the experience (and have saved a bundle).

Of course, it may be worth considering refinancing other debts like your mortgage or credit card debt as well. For example, Bankrate helps you shop mortgage rates, and I’ve always found some of the most compelling offers through them. When it comes to credit card debt, while more complicated, you could consider consolidating your debt through an app like Tally; however, only do this if you commit to a plan to stop taking on more debt. You can check out my Tally review to learn more.

Spend Less on Food & Drink

Continuing down the list, people tend to spend a fortune on food and drink. I’m as guilty as anyone in this category. I like to shop at Whole Foods. Doing so isn’t cheap. But as a tradeoff, I rarely eat out (a couple of times per month). 

It’s not about sacrificing with your money (especially when it comes to food), but it is about prioritizing. Want to reduce what you spend on food? Here are some ideas to get you started!

  • Eat Out Less:  It may seem obvious but eating out less will save you a lot. And when you do eat out, consider drinking water. It’s a lot cheaper than alcohol or soda and a lot better for you.
  • Shop Mindfully for Groceries:  Go to the store with a list. By planning your meals, you’ll be less likely to buy things you don’t need vs. if you just wing it. Also, look at what things at the grocery store cost. Ever notice how expensive paper towels are? I didn’t know until recently. Use a reusable towel instead. Check the price of meat. It’s a lot more than you think. Consider eating more vegetable-based foods to save money. Lastly, buy what’s in season. When fruits and vegetables are out of season, they cost more.
  • Use the Ibotta App to Earn Cash Back:  I recently started using an app called Ibotta. It helps you earn savings on grocery purchases. Plus, it can even help you save on online purchases (including places like DoorDash).

Find Ways to Save on Spending

When spending money, it’s worth considering ways to save on your purchases. A few of my favorites include:

  • Avoid Impulse Buys:  If you want to know how to live on less money, one of the keys is avoiding impulse buys. Often, impulse buys result in needless spending. One way to avoid impulse buys is to implement the 30-day rule. Avoid purchasing until you’ve waited 30 days. If you still want something after 30 days and can afford it, great! But chances are, after 30 days, you will have long forgotten the purchase you intended to make.
  • Use a Cash Back Credit Card:  If you’re diligent in paying your bills in full each month, consider using a cashback credit card for all your purchases. If you get, say, 1.5% back on every purchase, it’s like getting a discount on everything you buy. My favorite cashback credit card right now is the Chase Freedom Unlimited.
  • Round-Up Spending:  If you’re spending money anyway, you might as well invest a little extra to start building wealth. With Acorns, you can do exactly that. Acorns rounds up your purchases and invests the difference. While it may be just a few cents initially, it can add up. Check out this deep dive on Acorns to learn more. 
  • Use Rakuten or Honey for Online Shopping:  I do almost all my shopping online these days. While Amazon is my go-to, I occasionally make purchases from other places. And when I do, I’ve found that using browser extensions like Rakuten or Honey can save me money. These browser extensions provide cashback (in the case of Rakuten) or coupons on the items you’re purchasing (in the case of Honey). It takes almost no effort to save using these tools!

Reduce Your Energy Bills

While maybe not the biggest line item in your budget, utility bills can be painful. And they’re one of the areas of your budget you have a lot of control over. If you want to save money on utility bills, use energy-efficient products. Some ideas to consider are:

  • Get a Smart Thermostat:  A smart thermostat learns when you’re home and is highly programmable to help you save money. I use this one from Ecobee, and it’s helped me pare back my energy usage.
  • Replace Your Lightbulbs with LEDs:  Not only do LEDs use much less energy, but they last a very, very long time. While they cost a little more upfront, they’re an excellent long-term investment, particularly for lights you use often. 
  • Use Smart Power Strips:  A smart power strip can shut off your electronics when you’re not using them, helping you save money. I have yet to implement these in my home, but it’s on my “to-do” list, as I know I could save some money.

If you’re already using energy-efficient devices like those mentioned above, make sure you’re doing the little things. Turn off lights, unplug items from the outlets, and hang up clothes instead of using a dryer.  

Lower Other Variable Expenses

There are countless variable expenses (those that fluctuate month to month) that show up in your budget. Use these little tips and tricks to save on everyday expenses. 

  • Shop Car Insurance:  All car insurance isn’t created equal. Insurance rates vary widely by carrier. While you don’t want to skimp and choose a “fly-by-night” carrier, it is worth shopping around. The Zebra offers instant quotes from many carriers, helping you find the best rate for your situation. 
  • Pay Less on Everyday Bills:  Bills like cable, internet, cell phone, and home security add up quickly. But a little-known secret is that you can negotiate these bills. You can do it yourself or have a service do it for you. I use Truebill, and I have quite literally saved thousands from doing so. Truebill negotiates your rates (and never changes your services), and then they keep a slice of the savings.
  • Watch Out for Subscriptions:  Subscriptions are brilliant marketing tools but terrible for consumers. How many subscriptions have you signed up for that you never use? I am guessing a few. Go through your credit card statement and see which subscriptions you can cancel. Oh, and Truebill can even help you cancel subscriptions, too!

Other Tips & Tricks to Live on Less

While we’ve now covered the most impactful ideas for you to learn how to live on less money, there are some other tips and tricks I wanted to share. 

  • Spend Mindfully Around the Holidays:  It’s easy to over-indulge on gifts for others during the holidays. I am as guilty as anyone in this regard, as I like to spoil friends and family. Instead, plan for this spending throughout the year and stick to that budget! Check out this post on how to do Christmas on a budget to learn more.
  • Sell Clutter:  Want to bring in some extra cash? Consider selling your old items that are collecting dust around the house. Services like Decluttr will buy old electronics, textbooks, DVDs, and more. 
  • Avoid Bank Fees:  Bank charges like overdraft fees are terrible. While they’re avoidable by planning your spending, sometimes mistakes happen. When they do, give your bank a call to see if you can get the charge reversed or use Truebill to try to get a refund.


Truebill is a bill negotiation service that will help negotiate your regular bills, track your subscriptions, and help you save. You only pay when Truebill saves you money, so you have nothing to lose. Check out our review to learn more!

Rules to Live By

Now that you know how to live on less money, I want to share some rules to live by. These rules will serve you well no matter your current financial position. 

  • Avoid Lifestyle Creep:  Lifestyle creep is one of the surest ways to secure a position in the rat race. Living on less means not inflating your lifestyle when your income rises (e.g., when you get a raise). Identify what is enough for you and avoid keeping up with the Joneses. 
  • Save from Your Top Line:  Rather than seeing what’s leftover after your spending, save before doing anything else (i.e., pay yourself first). When money hits your account, put it in an interest-bearing savings account (I like CIT Bank), or invest it in a brokerage account with someone like M1 Finance. By paying yourself first, you’ll increase your odds of saving more money. 
  • Don’t Live on Bonuses:  When you receive a windfall, don’t spend it or use it as ordinary income. Instead, sock it away or invest it. You can use this extra cash to create more income – something far more meaningful in the long run.
  • Track Your Spending:  Cliché? Yes. Necessary? Yes. You will not succeed with money unless you track your spending. It’s as simple as that. Use a budgeting app like Tiller Money or PocketSmith to start tracking your spending and using your money only on the things that are important to you.

Frequently Asked Questions

Before we go, I want to tackle some of the most frequently asked questions about how to live on less money. 

  • How do you live comfortably on a low income?

Just because you’re living on less doesn’t mean you have to feel like you’re living poor. You can live very comfortably by directing your money towards spending that aligns with your priorities. Want to go out to eat? Do it. Want to live in a nice place? You should. But the point is that living on less means spending money on what’s important to you, not spending your money on anything and everything.  

  • Is it possible to live on less than half your income?

Yes, it is possible to live on less than half your income. The truth is it isn’t easy. But if you implement many of the tips above, you’ll be well on your way. Just know that it will take some sacrifices to do so.

  • Does being frugal mean being cheap?

One of the big misconceptions is that being frugal means being cheap. On the contrary, however, being frugal means spending money with intention. Rather than buying something cheap, a frugal person may pay a little bit more on a higher quality item that will last longer, saving them money in the long run. 

  • What are the benefits of frugal living? 

If you’re trying to figure out if frugal living is worth it, ask yourself about your priorities. If your priorities are more time with friends and family, fewer years working, and more time freedom, then yes, frugal living is worth it. 

How to Live on Less Money:  Summary

If you’ve been asking yourself, “how can I live on less income,” you now have the answers in hand to take action. Rather than viewing living on less as a sacrifice, view it as an investment in future freedom. 

You can become very wealthy by living below your means. With the steps above, start living on less and loving it more. Because the choices you make today will mean more time, flexibility, and hours spent with loved ones in the future – and that’s what counts.

So, start acting. Implement at least a few of the ideas mentioned above today!

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