Live below your means - Talk About Marriage
Financial Problems in Marriage When financial times are tough, it adds to the stress we deal with on a daily basis. This section is for talking about how financial problems affect our relationships and ways to cope.

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post #1 of 67 (permalink) Old 02-07-2015, 04:21 PM Thread Starter
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Live below your means

For most of our 21 years of marriage, I've been the sole or main income provider, with an average income from working of about 45k a year. This isn't a huge amount for California, but early on we started a process whereby we now make another 25 to 30k a year through passive, or invested income. Plus we don't have any mortgage left on our house.
Basically we did this by always living below our means, living frugally and responsibly. It meant rarely eating out or going on pricey trips, and always buying good used cars. 10 years ago we paid off our house and then began putting money that went into house mortgage payments and prepayments into investments. Now our investment income is closing in on matching what we make by working (not there yet but in a few years it hopefully will be). And as our income has grown we have expanded our budget as well so we can enjoy this income more than we did while we were building up our capital.
Every day while driving at my job I listen to people call into the Dave Ramsey show (I don't always agree with him, but he has generally good ideas IMHO) with their stories of success, and I also frequent the Mr Money Mustache forum where people chime in with their stories, so these things can be done, especially for couples making a good income.

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post #2 of 67 (permalink) Old 02-07-2015, 05:49 PM
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Re: Live below your means

You are very lucky if you and your wife have similar financial goals and agree with how to reach them.

I think the problem most couples have is that one is a saver and one is a spender, or in some other way one is financially responsible and one is financially irresponsible.

You can live below your income on $10k a year if you are financially savvy. And you can bankrupt yourself at $100k (or a million) a year if you are a financial idiot.

We have a household of 2 adults and 5 kids. We get by on $2200 a month gross income. Because we have learned how to pinch pennies, and we've gotten some much appreciated assistance from family members. So far we have managed like this for over 5 years and we have never ONCE applied for public assistance of any sort except unemployment during periods of layoffs. We may not have anything saved up for retirement but when you have 5 kids on a low income there are some things that just have to fall by the wayside. Oh and until recently we had absolutely no debt, either.
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post #3 of 67 (permalink) Old 02-07-2015, 11:43 PM
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Re: Live below your means

Good evening all
don't forget though that in the end - you are dead. I watched my and my wife's parents live their lives very frugally, and save religiously. All of my fathers money went to the nursing home (10 years with dementia), and we've inherited my wife's family money - which we now spend doing all of the things that they should have enjoyed when they were alive.
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post #4 of 67 (permalink) Old 02-08-2015, 02:05 AM
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Re: Live below your means

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Good evening all
don't forget though that in the end - you are dead. I watched my and my wife's parents live their lives very frugally, and save religiously. All of my fathers money went to the nursing home (10 years with dementia), and we've inherited my wife's family money - which we now spend doing all of the things that they should have enjoyed when they were alive.
Yep, there is a balance that has to be achieved. Too much spending is just reckless. Not enjoying your life is also reckless. It turns life into a drudgery.
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post #5 of 67 (permalink) Old 02-08-2015, 02:07 AM
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Re: Live below your means

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For most of our 21 years of marriage, I've been the sole or main income provider, with an average income from working of about 45k a year. This isn't a huge amount for California, but early on we started a process whereby we now make another 25 to 30k a year through passive, or invested income. Plus we don't have any mortgage left on our house.
Basically we did this by always living below our means, living frugally and responsibly. It meant rarely eating out or going on pricey trips, and always buying good used cars. 10 years ago we paid off our house and then began putting money that went into house mortgage payments and prepayments into investments. Now our investment income is closing in on matching what we make by working (not there yet but in a few years it hopefully will be). And as our income has grown we have expanded our budget as well so we can enjoy this income more than we did while we were building up our capital.
Every day while driving at my job I listen to people call into the Dave Ramsey show (I don't always agree with him, but he has generally good ideas IMHO) with their stories of success, and I also frequent the Mr Money Mustache forum where people chime in with their stories, so these things can be done, especially for couples making a good income.
It's not so much what a person's income is, but what they do with that income leads to either having accumulated assets or living hand to mouth.

Have you ever read the book "The Millionaire Next Door"? I think you would enjoy it. I've sure you can find a used copy on some place like Amazon
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post #6 of 67 (permalink) Old 02-08-2015, 12:06 PM Thread Starter
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Re: Live below your means

Yeah, the balance thing is very important. I've struggled with it over the years, in terms of how many hours I work. Now, I'm working about 32 hours a week, and at my peak I worked about 40 hours a week. This has meant less new savings, but more time at home, (which is usually a good thing).
Also, we are now more open to things like paying for our son's 50 dollar a month gym membership as he plays on the basketball court there often. Or helping our daughter go to various youth group events. Its nice to have choices in these matters.
Yes, the Millionaire Next Door is a great book.
Cusegal, good job on getting by on a modest income, with 5 kids. Are you and your husband hoping to increase your family income? 2200 a month is a pretty tight budget.
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post #7 of 67 (permalink) Old 02-08-2015, 12:18 PM
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Re: Live below your means

I don't know how you all live on so little! Our mortgage and private school tuition alone is more than $2200 a month! We could live in a smaller home in a less desirable area, but that isn't the kind of lifestyle we wanted. I have a friend who has a much cheaper home and lives like this; she also has drug dealers as next door neighbors and had a break in last year. The cost/benefit analysis means we live where there are kids, where the schools are good, where home values are rising, where crime is low, etc.
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post #8 of 67 (permalink) Old 02-08-2015, 12:27 PM
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Re: Live below your means

Most people are working themselves to death to buy crap they don't really need. A quick trip to an estate or divorce sale where people's lives are sold for pennies on the dollar ought to bring things into perspective. You need a house. You don't need a mini mansion. You need transportation. You probably don't need a $65K car or truck. You need marketable job skills. You don't need $90K in student loans for a degree that might get you a $30K a year job. Most folks who give the appearance of great affluence are worse off, financially, than the average homeless person. The homeless usually have no debt.
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post #9 of 67 (permalink) Old 02-08-2015, 12:36 PM Thread Starter
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Re: Live below your means

I must admit a key thing for us was we bought our home in the Sacramento region (one of the nicer suburbs), in 1998 when prices were pretty low. We paid alot down, so no pmi, and then because of the low purchase price have had 17 years of low property taxes. And of course due to low purchase price were able to pay off the mortgage by 2004. All of that was a key component in our case.
My wife did have a tiny loan to her parents related to her schooling, of 1,000 dollars or so, that we paid off soon after we got married. Outside of that, the home loan was our only debt.
Our kids have gone to public/charter schools, and my daughter will be starting at a community college next year. If she goes on to a four year school later we, her grandparents, and she will all chip in to make it happen for tuition.
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post #10 of 67 (permalink) Old 02-08-2015, 12:42 PM
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Re: Live below your means

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Most people are working themselves to death to buy crap they don't really need. A quick trip to an estate or divorce sale where people's lives are sold for pennies on the dollar ought to bring things into perspective. You need a house. You don't need a mini mansion. You need transportation. You probably don't need a $65K car or truck. You need marketable job skills. You don't need $90K in student loans for a degree that might get you a $30K a year job. Most folks who give the appearance of great affluence are worse off, financially, than the average homeless person. The homeless usually have no debt.
This is all true. But in some areas of the country, the rent on even a small apartment is extremely high. For example a brother of mine lives in the LA area. He has a very small 2 bedroom apartment. Here where I live, the apartment he has would be considered in a bad area and would cost about $800 a month.

I keep trying to get my brother to move here. But his income in LA is nearly double what it would be here. So it's a trade off.

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post #11 of 67 (permalink) Old 02-08-2015, 12:55 PM
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Re: Live below your means

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I don't know how you all live on so little! Our mortgage and private school tuition alone is more than $2200 a month! We could live in a smaller home in a less desirable area, but that isn't the kind of lifestyle we wanted. I have a friend who has a much cheaper home and lives like this; she also has drug dealers as next door neighbors and had a break in last year. The cost/benefit analysis means we live where there are kids, where the schools are good, where home values are rising, where crime is low, etc.
These are the kinds of choices that a person makes. Each of us has to do that for ourselves.

Fro example you chose to send your child to private schools.

I have a brother two brothers who did not want their kids in public schools. One lives in LA and the other here in NM. They have both used the home school system. In both LA and NM, the public schools have on-line schools that the kids can use at little to no cost.

The kids of both of my brothers have a much better education than is offered in any public school for kids to attend at the school and really in most private schools.

The ones who live in LA.. for example my nephew graduated from high school and with an associates degree at the same time at the age of 17. 2 years later he's graduating with a BS and is not going into medial school. My bother's bill for his son's junior high and high school education? Next to nothing. And yes he and his wife both worked. Besides my brother's job at a hospital, they owned a business and the kids grew up helping in the business.

My other brother's kids have been home schooled too from the start. They are now the in last two years of high school. Both will graduate from high school with an associates degree. Both have been active in things like civil defense, rescue, etc. My nephew is a pilot.. his dream is to be an air force pilot. So his parents got him into the air civil defense and he got his pilot's license.. it think that he got the training for free.

There is no need for any parent to pay big bucks for private school if it's a hardship. It's a choice.
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post #12 of 67 (permalink) Old 02-08-2015, 01:00 PM
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Re: Live below your means

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Most people are working themselves to death to buy crap they don't really need. A quick trip to an estate or divorce sale where people's lives are sold for pennies on the dollar ought to bring things into perspective. You need a house. You don't need a mini mansion. You need transportation. You probably don't need a $65K car or truck. You need marketable job skills. You don't need $90K in student loans for a degree that might get you a $30K a year job. Most folks who give the appearance of great affluence are worse off, financially, than the average homeless person. The homeless usually have no debt.
Another example of how personal choices make the difference.

I just bought a house. I could have bought a similar home in the area for a lot more than I am willing to pay. But I searched until I found a foreclosure that was a steal. I am still shocked at the deal I got.

The thing that I love about that book, "The Millionaire Next Door" is that the authors were surprised to find out that most millionaires are just the guy and his wife who live next door.

Most people who appear to be rich are just living paycheck to paycheck. Most of the people who inherit a lot of money destroy that wealth in their lifetime, or sooner.

IT's not what a person makes that counts. It's how they spend, save and invest.
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post #13 of 67 (permalink) Old 02-08-2015, 02:13 PM
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Re: Live below your means

When it comes to buying houses: location location location

Buy the worst house in the best neighborhood you can afford. Worked so good for us that we flipped it for a six-figure profit. And thus started our house flipping side business.

Living below your means: if you do this long enough, you can bank a good chunk of your raises and build savings. We lived as if poverty stricken for 3 years to save down payment on a house and funds to renovate it. Both of us worked 2 jobs; at one point husband had 3 jobs. Wouldn't trade those 3 years for nothing. Taught us how to live always below our means. Probably could not be a SAHM if it wasn't for building that foundation. And wouldn't have had expendable capital to flip houses if it wasn't for that 3-year foundation. We still save for extra things we want even though we have the money to buy it. We only withdraw from savings for emergencies. All because we live BELOW my H's paycheck.

Cheaper gas: this is a good opportunity to put away a few extra dollars a month. Somewhere along the line, something is going to get more expensive as a result of cheaper gas (maybe gas will go up higher than it ever was). So it's good to put aside that extra savings from cheaper gas.
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post #14 of 67 (permalink) Old 02-08-2015, 02:30 PM
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Re: Live below your means

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This is all true. But in some areas of the country, the rent on even a small apartment is extremely high. For example a brother of mine lives in the LA area. He has a very small 2 bedroom apartment. Here where I live, the apartment he has would be considered in a bad area and would cost about $800 a month.

I keep trying to get my brother to move here. But his income in LA is nearly double what it would be here. So it's a trade off.
We all make choices. Personally, I'd prefer to earn half as much but ultimately own my home in a decent area with lower taxes and lower cost of living. Rent can always go up and it generally will. I wouldn't live in LA if they elected me the mayor.
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post #15 of 67 (permalink) Old 02-08-2015, 02:35 PM
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Re: Live below your means

For $800 a month, in my area, he could buy about 2000 square feet of actual house in a real neighborhood of real human beings in a state with zero state income tax and plentiful jobs. Tennessee is also unlikely to fall into the ocean anytime soon.
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