How Living Below Your Financial Means Will Set You Free

There is a certain falsehood to the idea of “upgrading” one’s life and what that means financially. Once I turned 18, I finished high school and went to college — upgrade! Once I finished my bachelor’s degree, I went to graduate school — upgrade! Once I finished my doctorate, I got a job making $80,147 plus benefits — yet another upgrade.

Every time I had an “upgrade” in life, I thought that I deserved a higher standard of living. I thought to myself, “I worked hard to get here, so I deserve to have nice things. The world owes me a good life.”

But I soon learned, the world owes you nothing.

I soon learned that every time I increased my standard of living and my level of spending, I was plunging myself further and further into debt. That bachelor’s degree cost me $-40,000 in net worth. The doctorate cost me $-50,000 in net worth! Add on all the other expensive things that come in life (a BMW, rifles, computers, an iPad, an Apple Watch, etc.), and I found myself in nearly $110,000 of debt at the beginning of 2016 (read more here).

Of course, the education and student loan debt was an investment in myself and my future, which I am grateful to have.  However, the falsehood of “upgrading” my lifestyle led me to live like my investments had already matured, rather than waiting to reap the rewards later. Rather than digging myself out of a financial hole, I (stupidly) kept digging downward. So, how do you get out of the hole?

The answer is simple: Live (far) below your means. 

Financial Offense vs Defense: A Real-world Case Study

In the book “Millionaire Next Door” by Drs. Thomas J. Stanley and William D. Danko, there is an analogy that I will never forget. Imagine a football team (or any other sport for that matter). There are two sides to the game — offense and defense. Offense is how you score points, defense is how you prevent points from being scored on you. The object of the game is to have more points than your opponent in order to win.

There is a team in college football that I have a special love/hate relationship with: the Texas Tech (TTU) Red Raiders.

Photo credit to and Texas Tech University.

The TTU football team is known for their prolific offense. Year after year, they field amazing quarterbacks, receivers, running backs, and an offensive line of 300+ lb. men to protect it all. They can score at any time, and with little effort. In fact, they were rated the best offense in all of college football in 2016, racking up an astonishing 564.5 yards per game.

However, at the end of the 2016 season the TTU Red Raiders finished with a 5-7 record, failing to make the postseason despite their top-rated offense. Why? Because their defense was one of the worst in the nation. Despite scoring an average of 37 points in each of their losses, they allowed their opponents to score an average 54.6 points in each of those losses!

So, how does this relate to personal finance?

Your income is your offense. Every time you earn a dollar, you score a proverbial “point” in your favor. Your ability to control your spending is your defense. Every time you spend a dollar, a point is scored against you. So, there are two ways to move the needle in your favor: make more, or spend less. Which is the easier of the two to change?

Making more money is always good, but spending less is the quickest way to change your financial position.

When I was a broke college student, I spent every dime I had just to get by. I didn’t have any other choice — my budget was just $14,000 a year, roughly the federal poverty level. I had enough to pay my bills, buy cheap groceries, and keep ~1/4 of my gas tank filled. When I had some free time, I would play World of Warcraft for hours on end, which is one of the best entertainment values in the world ($15 a month for essentially unlimited entertainment). I was doing well to stay afloat. As I started my career and got married, our combined earnings skyrocketed to ~$160,000 annually. However, our net worth didn’t change nearly as quickly as our earnings would suggest, going from $-81,064 in January 2016 to $-30,221 in January 2017, a positive change of $50,843 ($4,236/month) over the course of a year.

What happened to all of the money? I increased my earnings 11-fold, surely we would be able to live off of that and pay the debt off in a year, right?


Lifestyle creep hit us, and it hit us hard. We moved into an expensive, brand new apartment. I bought a BMW (now sold – more on that to come in later posts) and tons of other toys I mentioned earlier. This being the case, our cost of living expenses and other liabilities increased as well. Of course, we didn’t have to live in poverty anymore, but the opulent life we had created for ourselves was ruining us financially.

With some discipline, and the support from the personal finance community, we are slashing our spending on frivolous things and throwing all of that money at the debt. We are beefing up our defense, and in a big way. And you should too.

When you reduce your spending, you learn a lesson that is vital to thriving in this world: Delayed gratification. Resisting temptation now for long term gain takes strength of character, planning, humility, and the courage to be different. I will no longer have the flashy car, or the latest tech, or go on big vacations. I will fall behind the Joneses, strictly on the superficial level, in pursuit of a greater goal: Financial freedom.

And it feels good.

P.S. Hook ‘em Horns!

6 Replies to “How Living Below Your Financial Means Will Set You Free”

  1. Great article!

    I’ve always identified well with the offense vs defense analogy. I have nothing against people working on their financial offense, but the easiest way to make sure the gains are locked in is by solidifying the defense.

    1. Trust me, if I could magically increase my earning by 50% then I would! But, it’s just quicker to cut the unnecessary spending from your life. The only thing I really miss is my favorite sushi place 😥

      I still cheat sometimes though 🍣

  2. Haha nice analogy there, you’ve got to love a good sports analogy.. Not sure I’m a fan of buying guns although being an Aussie it’s not in our vision to pick those up..

    Let’s hope your team and yourself play great defense for many years to come :)!

    1. Haha definitely a difference in cultures. Glad you enjoyed the analogy! I can’t take credit for it though. Thanks for reading, Jef!

  3. I don’t think anyone has much of an idea what delayed gratification means anymore – but I think mastering it is one of the most powerful things you can do to improve your financial standing.

    1. Totally agree! It’s something I didn’t do until I was an adult. It definitely takes a greater sense of the future. Thanks for reading!

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