Lower living expenses is a stupid reason to charge lower rates. I am not a contractor, but I can only imagine lowering my rates (if I were) if I was consistently underbid and not getting enough work or if I were doing charity work for a nonprofit doing important work.

If my living expenses were far below my rate, I'd save my money happily against the possibility my living expenses would go up or my income would go down in the future, and would not lower my rates.

If I occasionally lost a bid but still got enough work, I would not lower my rates.

As a worker, lowering your rates unnecessarily screws other workers, and future-you is another worker getting screwed.