Why spending less than you make is still the cheat code
The 60/20/20 Rule, the 'more is more' trap
The foundation of Frugal Chic is painfully simple: don’t spend more than you make.
Most of us were never taught personal finance in any meaningful sense. We learnt about supply and demand, opportunity cost, maybe even a bit of macroeconomics - but not how to budget a £30k salary, open up an investment account, or understand a mortgage offer. Unless you grew up with financially literate parents, you enter adulthood armed with theory, not practice.
That’s why the basics of personal finance sound almost too simple.
Spend less than you make
Increase your income
Set money aside for your future
These rules look simple on paper. They are far harder in practice. If they were easy, Buy Now Pay Later companies wouldn’t thrive, people would negotiate their salaries regularly, and no one would delay investing for years out of fear. The complication isn’t knowledge, it’s behaviour.
The first rule is the one everything else rests on.
If you spend more than you earn, you end up in debt - that part is unavoidable. If you spend everything you earn, no salary increase in the world will help you build wealth. You’re simply upgrading the treadmill you’re already stuck on.
Consider two people.
Person A earns £35k in London. Their rent is high, but they manage to save £200 a month.
Person B earns £70k and is drowning in credit card debt, lifestyle inflation, and impulse purchases, they save £0.
Despite earning double, Person B is financially fragile. Person A is quietly building wealth. Income helps, but it’s not the deciding factor in building wealth.
That’s not to say don’t try to increase income - of course, that’s how we build wealth, but increasing income without stable foundations and systems in place won’t necessarily propel you financially.
So how do you actually spend less than you make without feeling deprived or slipping into the beige, joyless frugality everyone dreads?
Creating a budget you stick to
Growing up, I’d hear the word ‘budgeting’ and instantly think of restrictions. Budget has many meanings, one of them is the lesser version of a more expensive product, e.g. ‘the budget version’. I associated it with cheapness. Therefore, when you go to think of budgeting your paycheck, you can feel the yawn coming on.
Budgeting doesn’t have to be restrictive, like most rules in life, it can be freeing. For example, if I know that I want to allocate £150 of my pay to ‘fun money’. That allows me to go buy whatever I want without feeling guilty as opposed to having the mindset, ‘I can buy nice things, but I can’t go too far’. It puts into a clear tangible goal.
The easiest thing to do is grab a pen and paper and see where you are now:
Reviewing your last one to three months of bank statements, or looking through your bank insights
Grouping spending into broad buckets (housing, food, transport, lifestyle, subscriptions, discretionary)
Noticing repetition, this tells you what your current priorities are.
That means you don’t start by slashing everything. You start by deciding what actually matters.
Maybe that’s:
Eating well at home
A gym membership you genuinely use
A skincare routine that actually works
Meaningful social events
Those stay.
What goes are the expenses that exist by default rather than desire. The spending that happens because you’re tired, bored, stressed, or avoiding something else.
A good budget feels supportive, not suffocating. If it makes you miserable, it won’t last.
60/20/20
A common rule of thumb is the 50/30/20 budgeting framework.
It was popularised by U.S. Senator and bankruptcy expert Elizabeth Warren in the 2005 book All Your Worth: The Ultimate Lifetime Money Plan. The idea is simple: allocate 50% of your after-tax income to needs, 30% to wants, and 20% to savings or debt repayment.
In practice, in cities like London or New York, it is often unrealistic.
When rent alone can take up 40–50% of take-home pay, expecting all essential living costs to fit neatly into the remaining margin becomes more aspiration than strategy. The result is that many people feel they are “failing” at budgeting, when in reality the framework no longer matches modern economic conditions.
For those wanting to practice a Frugal Chic mindset, the 60/20/20 method could be more feasible.
20% → Wealth
Investing and long-term savings. Automated. Untouchable.
60% → Living
Rent, bills, food, transport, health.
20% → Living well
Fun, travel, clothes, experiences. Guilt-free.
Of course, you could adjust it based on your own circumstances, but having a rough guideline and including a percentage to savings and investments sets the intention that leads to action.
This approach is rooted in the principle often attributed to Warren Buffett: “Do not save what is left after spending; instead spend what is left after saving.”
Paying yourself first means making freedom the priority. Rather than waiting until the end of the month to see what happens to be left, you decide in advance that part of your income is going towards building long-term security and optionality. Everything else adjusts around that choice.
I personally use The Frugal Chic budgeting template, and the Emma app to link all my accounts in one place, but this is not essential - you can make your own system.
Make it a ritual
We have so many self care rituals; 7-step skincare routines, retinol before bed, gua sha in the morning - why not romanticise our finances in the same way?
This is where the Chic part comes in. Fresh pjs, washed hair, lighting a candle and a methodically going through your expenses. Nothing is more satisfying than analytics.
I do this routine weekly of checking Emma and inputting it into my spreadsheet.
Frugal Chic is not about deprivation or aesthetic minimalism for its own sake. It is about directing your money with intention rather than letting letting yourself be swayed by convenience or advertising constantly.
Once the foundations of spending less than you make and paying yourself first are in place, everything else becomes easier to build on, whether that is investing, changing careers, starting a business, or simply feeling calmer about money.
A realistic budget is not restrictive, it’s built around your existing behaviour, your lifestyle and goals. The end goal isn’t to have perfect finances, it’s building a life where you have choice.
That’s all this week,
Resources - investing, budgeting apps and links to my forever wardrobe.
There’s nothing better for your nervous system, particularly as a self employed person, than living below your means. When I first started making good money, I increased all my outgoings, which just gave me a new minimum I had to make each month. It’s much better to just live comfortably and be smarter with money. I was stressed! Ha
As long as you know what's important, anything else that may tempt you goes into the "I'll buy later" bucket.