I have a pal who works with one of those international firms as a senior sales manager, earning a six figure salary. For the longest time none of us, his friends, knew exactly where lived, he had only mentioned that he lives in South B, so we' all figured that he lived in one of those expensive apartments in that area.

One night, my friends and I decided to ambush him. We called him up to inform him that we were in South B and wanted to see his place so he gave us the directions and we were soon there. To our surprise, we found that he lived in a self contained bed-sitter apartment, he only had a bed, his home theater and a TV, quit a modest living for some of his status. He is a single guy from a well to do family, but still one would expect that he would at least live in a one bedroom apartment, so you could tell the surprise on our faces.

Being driven by my fascination for such peculiar aspects I secretly embarked in studying his life, in an attempt to understand why he chose to live such a modest lifestyle and in turn I learnt some very powerful factors about living below your means.

1.       Clarify Your Purpose

Why are you living below your means? While there are those who live below their means basically because they are stingy with their money to even spend it on themselves, we still have those who are driven by a higher reason. During my secret investigation I discovered that in actual sense this friend of mine has a house construction project underway, so he was cutting down on his personal expenses to have more to spend on constructing of his house. Having a clear objective would motivate you to live below your means.

2.       Have a plan

You need to have a well thought out and logical plan for how you’re going to start living below your means. All change requires a plan and I really like the plan this friend of mine had. He was very methodical in his approach, he analyzed his situation very carefully and this increased his chances of success. While his peers drive fuel guzzlers, he drives a manual 1200 CC Toyota, thus fitting into the crowd of those who drive but at a much lesser cost. While his peers would live palatial residences that cost up to KSh 50,000 per month, he stays in a simple Bedsitter apartment that goes for KSh 15,000 per month.

While making rash financial decisions may or may not lead to better results, taking a deep breath and finding a rational voice of reason and formulating a sound plan would make it easier to live below your means.

3.      Identify those areas where you can cut on costs.

We might at times feel we’ve cut absolutely everything possible, however, that’s rarely the case. Most of us have a bunch of fat in our budgets that we simply do not see. Take for instance your area of residence, do you really need to stay in that expensive apartment, aren’t there cheaper alternatives around you. My friend stays in South B, where the apartment opposite his goes for KSh 30,000 with the similar same social amenities as his; he opted for the cheaper options of a KSh 15,000 per month, thus cutting on costs.

You have to track your spending and put everything out on the table in order to make this work. Nothing should be considered sacred and every shilling you spend should have a specific purpose.

4.      Stretch until it hurts.

You have to push it as far as you think you can. You have to squeeze that last little drop out of your budget so as to get the absolute most out of your money. If does not hurt then you are not stretching yourself enough. There is the temptation of wanting to fit in, but should you do it at the expense of your budget? Comfort should not come at the expense of your budget. A simple life is more enriching than an expensive one.

5.      Living beyond your means is painful

Living above your means would force you to borrow money in order to sustain this lifestyle. My friend lives a debt free life. He is not under the threat of being evicted by his landlord nor does he need to borrow around to make ends meet. Being in debt can have negative effects on your heath due to the stress involved in trying to settle the debt while at the same time trying to sustain your extravagant life style. I cannot recall the last time my friend complained of being sick, and that can be attributed to the stress free life he lives.

Wealth is nothing more than living your own life and living it as close to your principles as possible. It has nothing to do with the number of zeroes on your bank account. The person who makes KSh 50,000 a month and spends KSh 30,000 is wealthier than the man who makes KSh 100,000 and spends KSh 110,000 a month.  Spending less than you earn is the only way to get ahead with money.