If you are new to the pot of gold series START HERE: FINANCIAL FREEDOM. This article is in reference to factor 1: lifestyle.

Lavish lifestyle and padded bank account usually do not co-exist. VERY few people can have both. Most people have to choose.  If you choose the latter, this article is for you.

Living below your means =live way below your income.

Most people cannot increase their income very much. Therefore, you achieve financial freedom by saving. Play defensive. A dollar saved is a dollar saved. A dollar earned is less than a dollar (Courtesy of Uncle Sam). It is not what you make, but what you spend that determines your financial future. Do not let your spending habit be that noose that chains you to your job.

Did you notice I said the same thing 5 different ways? It’s called nagging according to my husband. It’s a mom thing.

The less lifestyle cost you have, the smaller pot of gold you will need to reach financial freedom. This is the opposite of YOLO mindset (You Only Live Once. I had to google that a year ago. You’re welcome!)


  • Frugal is about spending intentionally, as opposed to whenever it pleases you.
  • Be prudently frugal, and selectively extravagant. Meaning, spend when it matters, otherwise save.
  • It is all about discipline.
  • Determine an acceptable level of sacrifice. Frugality does not have to mean you suffer in misery.
  • Being frugal is not about counting every penny. It is about asking yourself:
    • Do I really need this?
    • Can I get it cheaper?
    • Is there a better alternative?
    • Should I use this money for something that really matters?
  • Status objects chain you to a treadmill of spending. You will need more money to “look the part”. For eg. Big mansion in a desirable neighborhood means housekeeping, maintenance, furnitures, landscaping, nice cars, higher property tax, private school, country club etc.


Everyone needs a budget. My favorite budgeting tools are Personal capital, Mint, iXpenseIt or Excel. I personally use iXpenseIt. The most important part about budget is sticking to it. 

  • Look at your expenditures for the past 6 months.
  • Categorize your expenditures.
  • Prepared to be mortified (I was!)
  • Have a plan to slash your expenditures. And be realistic. Identify categories that need improvement and then set a goal.
  • Make a plan to invest the money you saved. (This will be discussed in further details later)
  • Re-evaluate your budget every 6 months to make sure you are on target and to adjust your goals.


  • Home. If you cannot afford 20% downpayment, 15 year mortgage and your monthly take home income is less than 2x your mortgage, the house is too expensive for you. Just because you are approved for a mortgage does not mean you can afford it.
  • If possible, move out of high cost of living cities.
  • Car. It depreciates. It is not an investment. If you cannot afford to pay cash for your car, it is too expensive for you. Buy well maintained used cars. Never lease. If you have to buy new, at least shop around and negotiate.
  • Childcare. It is expensive, especially in major cities. Use family or friends whenever possible. It not, try your best to be creative with yours and your partners work schedule to minimize childcare expenses.
  • Marry once and marry the right person. Divorce will set you back. Work on your marriage. That is one of your most valuable asset.
  • Education. Private schools are often times unnecessary. Good parenting and good circle of friends matter a lot too.
  • Teach your kids about frugality, discipline and fincancial independence. Teach your own to live their own. Adult children who are ecomically dependent will cost you. Cash gift to adult children further dampens their initiative and productivity.
  • Healthcare. Plan ahead. Choose insurance based on best projected healthcare needs. Stay healthy. Eat well, work out and practice STRESS REDUCTION strategies.
  • Furniture. This is another depreciating status object. Read up on home decorating on budget. Hello Pinterest!
  • Status artifacts: luxury cars, boats, vacation homes, country clubs, expensive vacations etc. Is it really  worth delaying your financial freedom, maybe indefinitely?


  • Only use credit card if you can pay in full every month. Automate your payment so you are never late. Interest on late credit card payment is such a HUGE waste of money.
  • Use credit card with high points or cash back. Those are tax free money!
  • Change your phone service. Most people do not need unlimited data plan. And do not go over your data plan.
  • Be energy efficient. Switch off lights when you leave your house, use energy efficient lamps, set thermostat to keep room comfortable.
  • Take care of your assets. Put maintenance schedule on your calendar. That includes cars and other expensive appliances. It prevents breakdown and subsequent replacement cost.
  • Make your own coffee.
  • Pack lunch.
  • Eat out less. And when you do, do not order drinks. Order a large portion and share. Brown bag leftover for next day lunch.
  • Home cooked meals. Instead of buying packaged frozen meal, cook a huge batch and freeze. Instead of buying pre-cut produce, chop your own vegetable or fruits!
  • Go grocery shopping with a list and buy nothing more than that.
  • Seek out cheap date ideas by signing on to Groupon.
  • Ask for gift cards on birthdays.
  • Use credit card reward points to purchase travel.
  • Be handy with home maintenance.
  • Use second hand store for kids clothes. They grow out of them so quickly.
  • Never buy any expensive clothes (eg. Suits, evening dresses) at full price.
  • When traveling, pack snacks. Airport food is overpriced.
  • Do not buy just because something is on sale. You are still spending money.
  • Coupons app. I draw the line at physically clipping coupons.
  • Get rid of cable. There are plenty of cheaper and better options: Netflix, Amazon, Hulu etc.
  • Wash your own car.
  • Quit bad habits like smoking or drinking or bar hopping. It is good for your health too!
  • Use every last drop of common household items like toothpaste, shampoo, soap etc.


I’d like to live as a poor man with lots of money.

– Pablo Picasso

Yours Positively,

Positive Circle.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s