5 ways to live below your means without feeling deprived

Spending less than you earn is one sure path to financial security. But that doesn't have to mean a Spartan lifestyle. You can still enjoy yourself while living small. Here are five tips on how to live below your means without feeling like you are missing out:

Save off the top

Divert money from each paycheck before you are tempted by it. Once you start, it becomes painless to save through 401(k) paycheck deductions at work, or automatic monthly transfers to a savings or investment account. "Start small and add a percent or two every time your income goes up," said Leon LaBrecque, chief executive of LJPR Financial Advisors in Troy, Mich.

Pay yourself

When you finish paying off something — whether a smartphone, car or college education — continue making the same monthly payments you are accustomed to, but direct them to yourself. Stash the money in an interest-bearing savings account, and let it accumulate. The next time you want to buy something, you can pay cash — and feel the opposite of deprived.

Live off one income

Many dual-income families naturally budget their lifestyles based on money that two jobs bring in. But consider the benefits of making a conscious choice to live off just one salary. If it's possible, arranging your household costs so just one person's pay covers the bills provides significant financial freedom. Earmark the second paycheck for maxing out retirement savings, investing or paying off debt.

Hold back from buying the most expensive house the bank says you can afford. Instead, buy the small fixer-upper and make the house your own, said Diane Manuel, a certified financial planner in El Segundo, Calif. That way you can enjoy your nest without feeling stretched by the costs of homeownership like taxes, insurance and maintenance.

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