The Secret to Living Well on LessWhen I worked as a corporate lawyer in Manhattan, I spent a small fortune on shoes, clothes, restaurant meals, and other upscale accoutrements of urban professional life.

Now I live in a New England college town, working as a freelance writer. My expenses are a fraction of what they once were, and yet, I'm happier.

What accounts for the difference?
It's not that I've become a better or less materialistic person. I'm pretty much the same. What's changed is who I hang out with, what academics call my "reference group."

As Boston College sociology Professor Juliet B. Schor explains in The Overspent American, what we buy tends to be heavily influenced by "people we respect and want to be like, people whose sense of what's important in life seems close to our own." In other words, we are social creatures, and our spending habits reflect that.

Until late in the 20th century, this wasn't a big problem. Up to that point, we generally compared ourselves to our neighbors and peers -- we aspired, as the saying goes, to "keep up with the Joneses." But by the 1990s, for various reasons, our vantage point had shifted. Instead of comparing ourselves to folks down the street, many of us eyed the lifestyles of movie stars and billionaires.

Not surprisingly, such turbo-charged yearnings fueled massive discontent, a trend that's only intensified as the nation grapples with the Great Recession and its aftermath.

Happily, as Schor writes -- and as I have found -- there is a way back to reality. By making wise choices about our relationships, it's possible to painlessly shrink our desires while bolstering our bank accounts.

This hit home for me again the other day when I was out for coffee with three smart, creative women, and the subject turned to clothes shopping. But instead of talking about a Saks Fifth Avenue sale or where to score designer samples, we traded thrift store strategies -- and had a great time.

Even when you can't (or don't want to) ditch your friends or your ZIP code, it's still possible to change your life in ways that help you spend less. This is what behavioral economists call creating good "choice architecture" -- environments that make it easier for us to act in our own best interests.

Want to give it a shot? Here's a roadmap for getting started:

1. Learn what triggers your spending impulses.
Spending is the effect. What is the cause? Is it peer pressure, a desire not to feel left out when your friends are heading off for sunny vacations or upgrading shoes or cars? Or perhaps it's the ads you see on TV. (Schor cites research that suggests the more TV we watch, the more money we spend.) Whatever the trigger, seeing it is the first step.

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2. Brainstorm strategies.
Once you know what's prompting you to overspend, consider how you might change your life to reduce these pressures. You may find that you're happier spending more time with some friends and less time with others. Or even within a group of friends, you may find it helpful to change your shared activities. For example, instead of dinner and a movie, followed by window shopping, opt for coffee and a walk at a local nature preserve. Keep in mind that this isn't about willpower -- about beating back your desires -- but rather about exploring ways to actually reduce them.

3. Experiment and assess.
Pay attention to how you're feeling (as well as what you're spending). Try different approaches. Find what works for you. If one approach isn't effective, try something else.

Keep in mind that, whatever your strategies, it's highly unlikely you'll be immune to the company you keep. When your BFFs are going on about the latest "i toy," hot new restaurant or exotic vacation, it's natural to feel left out if you aren't keeping pace. With money (as with the rest of life), who we spend time with matters. Take it from me; it's far easier to live on less when your friends are doing the same.

What's your secret for living happily on less? Please share your ideas and comments with other SecondAct readers.

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