[wpseo_breadcrumb]Although it is often touted as the “secret to getting rich,” living frugally is more than a path to more money. It is the foundation for financial freedom.The concept of living below your means is simple, but the practical application can be a challenge. Nevertheless, finding a way to live below your means now will pave the way for a smoother financial future.Changing a lifetime of financial habits is not a quick or easy process. However, by taking time to educate yourself and by making small, incremental changes, you lay a foundation for financial freedom. Here are some crucial steps to take to start on your journey of living below your means.Step 1: Understand Your Income and ExpensesThe first thing you must understand is how much money you have coming in and how much money you have going out. The process for laying this information out is straightforward:Get a clear figure of how much income you bring in each month.Write down all of your fixed monthly expenses. These include everything from rent to car payments to health insurance.Subtract your fixed expenses from your net income. That’s how much discretionary money you have each month.In general, most people have sufficient income to cover fixed expenses. The problem is that we get out of control with our discretionary spending. To get that spending under control, you must first know exactly where that money is going.Step 2: Begin to Track Your ExpensesCreating a budget is the best way to ensure that you are not spending too much. It is crucial to your financial freedom to understand exactly where your money goes so you can adjust your spending habits accordingly. By creating a budget, you can prioritize your expenses and begin to make decisions about which expenses aren’t really necessary.Step 3: Cut Out Unnecessary ExpensesFor most of us, living frugally means cutting some expenses. Understanding the difference between wants and needs will make this step a little easier for you.Needs are the recurring expenditures that are essential for you to live and work. In contrast, wants are the things you buy for fun or leisure to help you live more comfortably. Once you have teased apart the wants versus the needs in your expenses, go through and cut as many wants as possible. You may be surprised at how much of your discretionary spending goes to wants instead of needs. By eliminating those expenses, you are taking a crucial step toward financial freedom.Step 4: Get Comfortable In This Standard-of-Living GrooveOnce you get to the point where you have your finances under control and are living below your means, the next step is become comfortable with a frugal lifestyle. Here are a few tips to help you maintain and enjoy you new standard of living:Disconnect spending from rises in income. For most people, the more money we make, the more money we tend to spend. Certified Financial Planner Ashleigh J. Brooker’s solution to avoid this is to set aside 80 percent of your net take-home pay and put the other 20 percent toward financial goals, such as getting out of debt or saving for retirement.Don’t compete with others. “Keeping up with the Joneses” will only drag you into financial mayhem. By constantly trading up to keep up, you end up in a vicious cycle that costs more every time you go around. It is important to learn to be happy with what you have and your new-found financial stability.Pay for most things with cash. Using cash to make purchases can help you manage your spending, especially your discretionary expenses. With cash, if you don’t spend it wisely, you won’t have any left to spend at all. Paying with cash will often lead to a new way of thinking about purchases.Learning to live below your means now will give you the financial freedom to live your life your way in the future. With a few simple lifestyle adjustments now, you can take back control of your money and eliminate some of the pressures of your financial obligations.