# Live below your means



## California man (Feb 5, 2015)

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.


----------



## 'CuseGal (Feb 5, 2015)

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.


----------



## richardsharpe (Jul 8, 2014)

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.


----------



## EleGirl (Dec 3, 2011)

richardsharpe said:


> 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.


----------



## EleGirl (Dec 3, 2011)

California man said:


> 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


----------



## California man (Feb 5, 2015)

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.


----------



## SurpriseMyself (Nov 14, 2009)

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.


----------



## unbelievable (Aug 20, 2010)

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.


----------



## California man (Feb 5, 2015)

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.


----------



## EleGirl (Dec 3, 2011)

unbelievable said:


> 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.


----------



## EleGirl (Dec 3, 2011)

SurpriseMyself said:


> 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.


----------



## EleGirl (Dec 3, 2011)

unbelievable said:


> 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.


----------



## thefam (Sep 9, 2014)

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.


----------



## unbelievable (Aug 20, 2010)

EleGirl said:


> 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.


----------



## unbelievable (Aug 20, 2010)

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.


----------



## Blondilocks (Jul 4, 2013)

"Tennessee is also unlikely to fall into the ocean anytime soon."

This is really funny.


----------



## 'CuseGal (Feb 5, 2015)

When you have zero housing payment and live with older cars, family of 7 on $2200 a year isn't actually all that hard. You just have to live without the extras. We keep our thermostat set at about 60 in the winter (which I admit sucks in upstate NY where it's usually below freezing and often even below zero), no A/C in the summer, don't eat out more than once a month (with 5 kids restaurants aren't much fun anyway), no car payments, no credit cards, health insurance for the kids is through the state so premiums are low, if my kids want extras (like electronics) they know to go to my ex because he can afford that kind of thing and we can't. All clothes come from thrift stores and garage sales. Books, CDs, movies are only bought used as well. We go to the library for internet access rather than having it at home. My cell phone is provided by my employer which is the only reason I have one.We're also very into self-sufficiency - we have a huge veggie garden every summer, also a lot of fruit trees, we do a lot of canning and preserving. We have chickens, we get milk from a neighbor who has a dairy farm, we bake from scratch rather than buying store-bought. Now I know people in urban and suburban areas don't have those options but in the country a little hard work can save a lot of money.

I am working on my master's degree but very slowly as I am already working 3 part time jobs just to make ends meet. Once I have it I hope to get public teaching job with some real benefits. My sister (who is the other adult, there is no adult male in our household) works one part time job during school hours and takes care of the kids the rest of the time. I get a decent amount of child support each month, she's in the process of trying to get survivor benefits for her kids as her husband died last month. It will actually RAISE our income - he was horrible about paying his child support.


----------



## unbelievable (Aug 20, 2010)

Blondilocks said:


> "Tennessee is also unlikely to fall into the ocean anytime soon."
> 
> This is really funny.


We have a few tornadoes and you might be trampled at the grocery store if it starts to snow, but we aren't falling into the ocean.


----------



## SimplyAmorous (Nov 25, 2009)

thefam said:


> *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. *


We so relate to your beginning years TheFAM....

No house flipping for us though (that has to be a lot or work!)....we had enough of trying to fix up our 2nd house (we called it our investment) with the plan to sell when we found what we wanted.. We spent 2 straight yrs ....work work work ..we made a profit, but it wasn't huge...did manage to sell it in just 3 weeks though. 

When we learned we were having a baby a few after getting married...it was a little scary to quit my full time job--he was only making a few dollars over minimum wage....we always had $$ saved though ...or I couldn't have done it... I am a worrier about things like this... 

A few yrs later...when living in our 2nd house....I worked smaller jobs around his schedule ...building upon our savings...we wanted as much to put down on our next house as possible...to have lower monthly payments .. 

So we scrimped, wasn't one to eat out much....did all our own home improvements /car repairs, we'd get manuals from the Library if we had to.. 

I always made sure we enjoyed family vacations though...to Sea World, 18 hr drive to Disney, but we'd never stay on property...visits to museums, amusement parks...things to build memories...you gotta live life!.. You realize money doesn't come easy, but it's there to be enjoyed too !!..it's not all work and no play..

Always used coupons/ rebates, BOGO, consignment shops were my friend, Ebay for their video games, etc....

We got our hands dirty & did some Crazy things looking back.. didn't like our gas bill, we built a chimney & installed a wood furnace...bought a 4x4 truck (in pieces)...cab separated from the bed, motor tranny laying over there (price -$700 but thousands in new parts)....hauled it home on a flatbed..(I was worried they'd never pull that off!).....but him & a friend ..they did it...took our 1st drive down the road 3 weeks later.. His Project truck...he was so proud.. 

H learned so much about mechanics during that ..this saved us so much in vehicle repairs over the yrs.... all of these little things.. they add up in the cost of living & managing of finances.. My H still prefers older cars for this reason... 

I bought this in our early marriage... The Complete Tightwad Gazette: Books...used to listen to the Suze Orman show. 

We, too, look to our early yrs determined to live *below our means*.... 16 yrs ago he got a better paying Job.. we eased up some.. a little more liberal with the spending.. but still it's been a way of life ...

A good health insurance plan...without that..no matter how frugal a family is...they could be wiped out within days of saving for a lifetime.. this was always a huge concern of ours..we always figured these costs in the job prospects he had... (So much is changing here, fewer employers offering it at all)... 

Probably all savers do this.... seeking credit cards with the highest cash back awards.. so long as one pays in full every month, they can earn hundreds in perks....


----------



## DTO (Dec 18, 2011)

SimplyAmorous said:


> We so relate to your beginning years TheFAM....
> 
> No house flipping for us though (that has to be a lot or work!)....we had enough of trying to fix up our 2nd house (we called it our investment) with the plan to sell when we found what we wanted.. We spent 2 straight yrs ....work work work ..we made a profit, but it wasn't huge...did manage to sell it in just 3 weeks though.
> 
> ...


I really like the part about spending money to build memories rather than have stuff (which probably will be unappealing or obsolete before long).

Agree about the need for affordable health insurance. I recently enrolled and realized my employer pays for less than half of the cost. I knew this company was ungenerous and had the leverage to factor that into my salary demands. But can you imagine having to pay for a family plan (>$600 per month) on a blue collar salary? (75% of all employees are production workers).

Overall, I agree there has to be a balance between spending and saving. However, I think many people err on the side of not saving enough. IMO, you need to plan very conservatively for retirement:

* You can't count on good investment returns when we went through a decade of low to flat market performance not long ago.

* You can't assume you will work until full retirement age if you get sick or hurt.

* You can't assume you will match your old salary if demand for your skills decline (learned that one the hard way).


----------



## heartsbeating (May 2, 2011)

EleGirl said:


> 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.


Agreed.

There's got to be a balance in life. 

I don't necessarily think debt in terms of a mortgage as a bad thing as it can be an investment. We have a mortgage and sure, if we didn't it would free up cash-flow. We could have bought a property that meant either being mortgage-free or lower payments ...granted we did go slightly above our budget when buying our recent home but to us it is worth it. We love the place and also feel there's strong potential to capitalize when the time comes to resell. We're aware of this in the decisions we make for the property - both how we'd like it to be as our home, as well as the value we are adding to the place. 

In saying all of this, the theory of living within means is certainly not one that can be argued with. I'm more budget-conscious than my husband. He's more the risk taker. And the balance is there between us. He's shown me to loosen up and enjoy it. I've demonstrated what being frugal can achieve. Interestingly, he has stated that if we were raising a family that would make him more cautious.

To me, the question with saving/earning/investing more money is knowing the why. Why does one need to earn more, invest more, save more... what's the driving motivation and is that the way to achieve it?


----------



## heartsbeating (May 2, 2011)

For those with families who have found ways to live with minimal financial concerns, I absolutely tip my hat to you.

There are wise choices to make, sometimes sacrifice and having smarts about you.... and there's sometimes just a matter of luck in this life. I think luck combined with savvy and sometimes taking risk/being bold can lead to certain goals being met.


----------



## pb76no (Nov 1, 2012)

Living below your means does not mean poverty or even being frugal. It means don't spend what you don't have. And that is only one part of the strategy for financial independence. What hasn't been mentioned (so far) is the savings and investment end of it. Get and read Bogleheads Guides to Investing. Visit the forum and Wiki.

The goal is financial independence. Living below your means is just one part of it.


----------



## SimplyAmorous (Nov 25, 2009)

DTO said:


> I really like the part about spending money to build memories rather than have stuff (which probably will be unappealing or obsolete before long).


By stuff..everyone cares about different things..... for instance, I carried around an old tracfone (cost for a cell about $85 a year) for 10 yrs.. I never cared..... it was for emergencies, good enough for me...and I gave it to him on those morning drives to work icy/snowy in case he broke down.. 

Just 2 months ago, I bought my 1st android..(hey that's a big deal!)...Love it by the way..... still a tracfone.. our oldest car is a 1991.. it's got that iron duke engine and we love this car-so faithful [email protected]#....had it for over 10 yrs...oh he had to replace a gas tank & some other things, nothing huge... .bought it for $2,000 (only 33,000 miles on it)..... we keep the paint job up.. we just don't need newer cars...doesn't bother me if we don't have the cd player & it's got winder winders (I even prefer those)...

If we wanted, we could buy a couple brand new cars & pay cash but we never would, for us, that would be the biggest waste imaginable.. though it's true, we often look at someone and probably judge by the vehicle they drive... many would think we must be really poor or we'd have newer.. but it's just not the case.. 

On the other hand, I wouldn't think anything of buying a $1,000 lap top, a new SLR...or something that really meant something to the kids...a specialty guitar they had their heart set on... We plan to go to Family resort , stay in a house...9 of us (bringing a couple friends )... just 2 nights.. over $2,0000 ...did this last year..and they want to go back. 

Our kids have i-pods, not cell phones.. so long as internet is available, it's just like having a phone..with the magic jack app/ free texting & all. I know some families that pay over $150 a month for phones, then a kid goes over upping their bill another couple hundred .... OMG -I'd FREAK !#@$..... But if one has a business.. they do need a unlimited plan..our oldest son found one for $12 a month.. he's pretty happy with it. 



> Agree about the need for affordable health insurance. I recently enrolled and realized my employer pays for less than half of the cost. I knew this company was ungenerous and had the leverage to factor that into my salary demands. But can you imagine having to pay for a family plan (>$600 per month) on a blue collar salary? (75% of all employees are production workers).


 It seems these plans can be all over the map...I have lost tract now, but I think they only take out about $250 a month for our family plan.. blue collar here too.. After reading what some pay.. It's just crazy.. I am very pleased with his plan yet I wonder what may come.. ..Ours is (or I should say was, I am sure it changed with the new year)..annual deductible $150 individual / $300 family..

Out of pocket Maximum $750 Individual/ $1,500 family.. if you stay in network that is.. 



> Overall, I agree there has to be a balance between spending and saving. However, I think many people err on the side of not saving enough. IMO, you need to plan very conservatively for retirement:
> 
> * You can't count on good investment returns when we went through a decade of low to flat market performance not long ago.
> 
> ...


 We started a 401 K when he got the better job, no matching from employer....my H seemed to be the only guy there who got into it...I don't know why... it's been accumulating very nicely... we may reach the goal we set out for ..but who knows... with the unsteady fluctuations.....we do pay a little extra to get it "managed" as this is not a strong point of either of us.. I also started an IRA years go in case he needed to roll it over, if he lost this job...so it would be in place..

Then having term life insurance for these years.. when so much is going on...I have a policy on him till he is 58...and just got another till he is 70...he's got one on me till I am 58.... 

His job offers a pension... Even if my H got laid off or we both had to take lower paying jobs ....I believe we'd be Ok ....because of what we have saved ...and having no debt... 

If things got really bad in later years.. there are those "Reverse mortgages"... I would absolutely HATE to use that though, would be an awful loss to the home owner, and our children... just saying.. in desperation.. it is there.. I do wonder if they consider acreage in that .. I bet they only give you like half or less of what something is worth.. I often wondered about those things. We hope to pass our house/property on to one of the kids..so it can be kept in the family.. sounds that has to be done a good 7 yrs before one dies or something.. many things to look into.. that we haven't done just yet.


----------



## jld (Dec 1, 2013)

You are amazing, SA. Such a smart consumer.


----------



## Blossom Leigh (Mar 27, 2014)

You guys are inspiring me... 

My H and I are considering ways to live more frugally...

We make good money with both working full time, good salaries, benefits and three rental houses, but I KNOW we could be saving more and we are looking at making a game out of it by first setting one whole income aside and seeing what we can do to leave it in tact. With our son, our dog, two horses and four households you can imagine that the unexpected expenses are frequent, we have learned to build in cushions, but are wanting to increase it. What have been your favorite resources to learn ways of doing this? 

I am a firm believer in no mortgage/rent or one that is no more than 10% of gross income, but I like this idea of shifting that to 10% of ONE income, not all three... we are wanting to shift to just one meeting all of our needs whether we keep all three streams or not. Yet, I also know we want to live... so this will definitely be an endeavor in creativity in meeting that balance. 

I'm not sure how possible 10% of one income will be in the city we are in. Our son is in the best school district in town which comes with high real estate prices. Looking around on that one....


----------



## SimplyAmorous (Nov 25, 2009)

> *Blossom Leigh said*: My H and I are considering ways to live more frugally...
> 
> We make good money with both working full time, good salaries, benefits and three rental houses, but I KNOW we could be saving more and we are looking at making a game out of it by first setting one whole income aside and seeing what we can do to leave it in tact. With our son, our dog, two horses and four households you can imagine that the unexpected expenses are frequent, we have learned to build in cushions, but are wanting to increase it. What have been your favorite resources to learn ways of doing this?


 You'e done well Blossom & husband !!..... 3 rental houses.. Nice !! :smthumbup:

If you could manage for just one year on one income...you'd be so encouraged how much you can save... it would inspire you to keep on.. .. than after the 12 months, by then...so many of the little changes will be a part of your "daily living".. some I doubt you would even miss.. ... 

We never buy drinks eating out (one little rule of ours as a family)..... it's always water.. unless something special like a milkshake or frozen coke.. (I am a sucker for those)...at a brewery we have eaten a few times...we let the kids get their special root beer made there on site...a real treat. 

This is a nice article with many tips...like making your own coffee, bringing a lunch, buy on sale/ in bulk, get a water filter over buying bottled water...etc etc.. 

Painless Penny Pinching: How to Save Big Without Feeling Deprived

What it says about the credit cards in there, It depends...I like to charge everything imaginable from food, to kids braces , to our heating oil, even taxes if they let me.. I was never one who spent more just because I had a card in my pocket though.. I have good self control here.. though not so much in other areas.. I guess we all have our weaknesses.. Credit cards are only good if one pays in full every month or they will cause much more harm & setbacks over good... 



> I'm not sure how possible 10% of one income will be in the city we are in. Our son is in the best school district in town which comes with high real estate prices. Looking around on that one....


 I think we are in a really low cost area.. people can buy a house in our smaller city towns...on the fixer upper side for like $30,000 .... the unemployment is high though..

Our state offers a program called "*Clean & Green*" to property owners with at least 10 acres-to save on property taxes.....but there are stipulations to what one can do with their land..... it could go belly up at any time though...and I expect it will in the future.. . Not sure if all states have something like this, or some form of it...if you want to sell your land in the near future ... sub dividing it though, this would put a fork into some of those plans or you'd have to pay back taxes.


----------



## Blossom Leigh (Mar 27, 2014)

Thanks SA... we are not debt free, but have very little debt in comparison to our assets and two of the houses pay off in November of this year... that's some super coolness right there. I am looking at placing my horses on loan to a special equestrian program to defray the cost and food is our biggest budget buster. So, I am proud of how far we've come and decisions we've made. His car is free and clear. My truck has a tiny balance on it. Thanks for the articles.


----------



## SimplyAmorous (Nov 25, 2009)

Blossom Leigh said:


> Thanks SA... we are not debt free, but have very little debt in comparison to our assets and two of the houses pay off in November of this year... that's some super coolness right there. I am looking at placing my horses on loan to a special equestrian program to defray the cost and food is our biggest budget buster. So, I am proud of how far we've come and decisions we've made. His car is free and clear. My truck has a tiny balance on it. Thanks for the articles.


THat is coolness !...There are many forums on frugality online too... something like this section on the "Simple Living" forum.... 

Frugality, Products & Purchases

...Or this section... Personal Finance
Getting out of debt, credit cards, socially responsible investing, money management, etc


----------



## john117 (May 20, 2013)

Live below our means? We do. I saved $6k by not buying the Mini Cooper JCW and had to be content with the S model


----------



## frootloop (Dec 20, 2010)

unbelievable said:


> 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.


I suspect the whole "falling into the ocean thing" started as a way to keep the anti-science people out of California. Seems to be working so far. My bet on the next state due to be lost to the ocean anytime soon is Florida.

It is expensive in CA. When I first moved here, my salary doubled, but my rent tripled. This might sound like a bad deal, but once you can afford a house, you can lock-in a housing payment, while your pay continues to rise.

Many expensive things you might want to buy, like cars and stock in companies cost pretty much the same no matter where you live, which equates to them seeming cheaper at a higher salary.

Another thing, at least near Silicon Valley - the economy here never seems to wane much. While I see complaints on the internet, during bad economic times for the country I'm still waiting for 20 minutes to get a seat at a restaurant here.


----------



## Angelou (Oct 21, 2014)

This makes me think of the show extreme cheap stakes


----------



## northernlights (Sep 23, 2012)

Cheapskates here too! You do have to be careful to not got _too_ into saving, it can be as addicting as spending, and you'll find yourself stressing over inexpensive necessities (though this also probably comes from growing up poor).

And I agree that it's important to keep a balance. We travel extensively and try to be generous with family (entertaining, gifts for nieces and nephews, charitable giving). It's a balance, and hitting the next milestone always feels really good.


----------



## optimalprimus (Feb 4, 2015)

I've seen research that there are as many people who are 'irrational' savers as 'irrational' spenders.

I am a financial worrier and am more inclined to be the former. recently spent our life savings on our first family home and with a child on the way, my stress levels are rising! will feel better once we have a nice 6 months living cost cushion....


----------



## Woodchuck (Nov 1, 2012)

unbelievable said:


> 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.


We did just that in NE Arkansas....almost 2000 sq feet for under $800 per month. Our street is populated by retirees, Dr.'s and one state senator...A mile from shopping and outstanding health care....

We have huge oak trees in the front yard, and total peace and quiet...$600 a year in property tax.


----------



## Runs like Dog (Feb 25, 2011)

Portugal and Viet Nam are cheap to retire to.


----------



## Starstarfish (Apr 19, 2012)

Sometimes people aren't "living beyond their means" when they get into difficulties, the #1 cause of bankruptcy in America is medical bills and medical debt. Plenty of people make all the arguably "right" choices and things don't work out the same because of factors like illness. 

So, as a reminder, not everyone who rents or doesn't own property or seems to have financial issues is "buying crap they don't need." There's a lot more to it than that, but ... as the usual suspects on politicized financial issues have now arrived, I'm not going to say anything else lest this thread turn into the same thing every other one does.


----------



## Pollo (Oct 17, 2014)

unbelievable said:


> 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.


One of the reasons property is so cheap is because crime is terrible in Tennessee. You get what you pay for I guess.


----------



## Pollo (Oct 17, 2014)

Woodchuck said:


> We did just that in NE Arkansas....almost 2000 sq feet for under $800 per month. Our street is populated by retirees, Dr.'s and one state senator...A mile from shopping and outstanding health care....
> 
> We have huge oak trees in the front yard, and total peace and quiet...$600 a year in property tax.


When you say $800/month is that rent or a mortgage?


----------



## Mr The Other (Feb 1, 2014)

Apologies for this smug post. In preparation for my divorce settlement, I looked into my pension. Apparently, if I retire at age 60, my income will more than double. 

That said, I used to live in Oxford, UK. No car, no holiday, weekly trip to the pub but that was it. About 40% of my income went to paying for a room in a shared apartment and I saved hard to put aside £100 a month. What has changed since then is income.


----------



## john117 (May 20, 2013)

I spent a few weeks on assignment in Huntsville AL where the locals loved the low property taxes and yet complained the local school system was so bad they had to send their kids to private schools...


----------



## DTO (Dec 18, 2011)

john117 said:


> I spent a few weeks on assignment in Huntsville AL where the locals loved the low property taxes and yet complained the local school system was so bad they had to send their kids to private schools...


Ah yes, that whole "taxes are terrible" thing. I recall during contract negotiations some years back people were saying that "the teachers make more than I do" so screw them, and for them to go teach somewhere else if they did not like the terms they were being offered.


----------



## turnera (Jan 22, 2010)

While I understand the need for access to internet these days, I have a hard time accepting the 'need' for 3 or 4 different forms of electronics today's generation feels is necessary. When DD25 started college, I attended an open house and one of the professors said that, yes, she would confiscate phones pulled out during her classes and, yes, a student could survive 45 minutes without people knowing if they were alive or able to send a response. The amount of 'stuff' we feel we have to have nowadays is so ridiculous.


----------



## chessasfo (Sep 12, 2013)

California Man... have you got a minute to talk with my husband... I'd like for him just to realise the importance of living WITHIN ones means. When faced with a massive financial changes, including rent increase of over $483, something has to give. Moving 30-40 miles away is an answer for now, especially when you work from home!


----------



## tech-novelist (May 15, 2014)

SimplyAmorous said:


> THat is coolness !...There are many forums on frugality online too... something like this section on the "Simple Living" forum....
> 
> Frugality, Products & Purchases
> 
> ...


www.bogleheads.org has excellent resources on this too.

Note that most of the posters there seem to have a LOT of money, so if that would bother you, consider this a trigger warning. >


----------



## tech-novelist (May 15, 2014)

Runs like Dog said:


> Portugal and Viet Nam are cheap to retire to.


Panama, Uruguay, Costa Rica and Ecuador are also popular retirement destinations. Of course, it helps to know some Spanish, but the good news is that Spanish is about the easiest second language for English-speakers to learn.


----------



## john117 (May 20, 2013)

Good luck getting Medicare or your health insurance company to pay there. My birth country in Europe (EU) looks good as a retirement destination till I realize that while I can get pension and social security there Medicare doesn't get accepted and out of pocket in a USA quality hospital is very expensive. Places like southern France or Italy may be more expensive but their average health care is very good. Since my family all have EU passports that's an option if costs are reasonable.


----------



## Runs like Dog (Feb 25, 2011)

technovelist said:


> Panama, Uruguay, Costa Rica and Ecuador are also popular retirement destinations. Of course, it helps to know some Spanish, but the good news is that Spanish is about the easiest second language for English-speakers to learn.


Uruguay is 95% white ethnic European, second highest standard of living in South America. They speak 3 languages, Portuguese, Spanish and Portunlo. Smattering of German.


----------



## tech-novelist (May 15, 2014)

Runs like Dog said:


> Uruguay is 95% white ethnic European, second highest standard of living in South America. They speak 3 languages, Portuguese, Spanish and Portunlo. Smattering of German.


As far as I know, Uruguay is mainly a Spanish-speaking country. It is next to Brazil, so I wouldn't be surprised to find some Portuguese spoken there, but all the media (newspapers, TV, ads) and signage in Montevideo and Punta del Este seem to be in Spanish.

There are a couple of interesting facts about their legal system. First, of course, they are the only country in the world where cannabis is legal. Second, it is pretty easy to get permanent residency there, and you can buy property without restriction (if I understand the rules correctly).


----------



## Ynot (Aug 26, 2014)

A problem that has gone unmentioned in this thread is the overall message that our culture is bombarding each and everyone of us with - materialism! Our country was built on it. Watch TV, listen to the radio, read a magazine, drive down the road - the message is everywhere. Often times people are just doing what they have been conditioned to do. The "gurus" tell people to buy the most expensive homes that they can afford. Commercials selling expensive jewelry to prove to her that she is worth it. Ads for $75,000 cars as Christmas presents. You can't get away with from it. You may actually be immune to it or at least recognize it. But if your spouse adopts the mantra you are screwed. Society tells them that somehow they aren't successful enough without the latest, greatest gadget. Not that any of this is an excuse, just that it is a part of the environment we all live in.


----------



## 3kgtmitsu (Jul 28, 2012)

Depends on where you live too, and how stable your income is. Its tough to adjust from making 5k a month with 2.5k in bills to nearly 6k in bills. 

We have done everything to cut corners, were stuck in a rental bubble where the cost of paying rent is higher than a mortgage, by the time you add food in there and insurance, phone bill, gas, etc its absurd. but since we are over spending were not getting enough traction on savings so were stuck renting until that can resolve. That and a high conflict spouse that talks the talk but doesn't follow rules well doesn't help. If you would of told me 10 years ago I would be making 60-70k and broke I would of laughed at you.


----------



## sapientia (Nov 24, 2012)

Most people do not come from generational wealth. Take a look at your grandparents and how they did it.

Mine fled for their lives and left land and businesses behind. Retired wealthy after working hard their lives and building back from nothing. Never agreed with nor needed welfare.

Our western entitled society is doomed to be outcompeted by bright hard workers from India, China, even Mexico.

I completely agree with Warren Buffet's philosophy on inheritence:

Boomers mimic Warren Buffett when it comes to inheritances


----------



## 3kgtmitsu (Jul 28, 2012)

Yes and they didn't believe in debt. These days debt is shoved down our throats as if its the way to live. Our cost of living has massively inflated over the last few years too, without wages following the trend. No one can deny that. 20 years ago a man could feed his family, have a car, decent house, and savings on $50k a year, and living comfortably. My parents prob made 50k a year, had 4 children, and by the time they retired they had over $400K in assets, which got eaten up by medial debt but that's another conversation.

Try that same formula today, it fails, even though $50k is the average income still.


----------



## sapientia (Nov 24, 2012)

3kgtmitsu said:


> *Yes and they didn't believe in debt. * These days debt is shoved down our throats as if its the way to live. Our cost of living has massively inflated over the last few years too, without wages following the trend. No one can deny that. 20 years ago a man could feed his family, have a car, decent house, and savings on $50k a year, and living comfortably. My parents prob made 50k a year, had 4 children, and by the time they retired they had over $400K in assets, which got eaten up by medial debt but that's another conversation.
> 
> Try that same formula today, it fails, even though $50k is the average income still.


This is true. I had forgotten this part. My grandparents never owned a credit card.

While incomes haven't kept pace with COL (depending on what that is for you), I don't believe that is the sole issue. I agree with you about our consumerist society.

There are plenty of people who still come from nothing and become successful. Make your own luck in this life.


----------



## john117 (May 20, 2013)

The consumerist society keeps many people employed. Me for example


----------



## 3kgtmitsu (Jul 28, 2012)

I would call myself a success..it just gets dampened when your life is constantly filled up with extra expenses created by your spouse or living situation


----------



## turnera (Jan 22, 2010)

I've talked to people about layaways, and saving money to buy something, and it's just such a foreign concept today. What do you mean I should wait on that fourth pair of tennis shoes? I need them!

I got a new outfit at the beginning of the school year, and it was mixed into the other stuff I had and still fit in, to create just a little bit more of a choice over the year. And if I was lucky, I got something else new to wear at Easter or on my birthday.

I'm just as guilty of raising my DD25 this way, too, though - taking her shopping whenever we felt like it. I'm just grateful she turned out to not WANT to spend that much money.


----------



## Runs like Dog (Feb 25, 2011)

I'm a frugal bastard. I audit stuff, I demand explanations. Our electronic online economy has promoted a very lackadaisical attitude towards fees, fines, mistakes, loans, service charges, accidents and the like. I can't tell you how many times I go over my kids bills and they don't know what's in them. This is why 'identity theft' is a small part of the problem compared to the way things are supposed to work.


----------



## Ynot (Aug 26, 2014)

Runs like Dog said:


> I'm a frugal bastard. I audit stuff, I demand explanations. Our electronic online economy has promoted a very lackadaisical attitude towards fees, fines, mistakes, loans, service charges, accidents and the like. I can't tell you how many times I go over my kids bills and they don't know what's in them. This is why 'identity theft' is a small part of the problem compared to the way things are supposed to work.


The cost of identity theft is probably a drop in the bucket relative to the cost of identity 'donation' by way of junk fees and charges in commerce.


----------



## As'laDain (Nov 27, 2011)

9 years ago, i made about 70 grand. then i joined the army and made 18 grand. last year i brought in about 60, but then i got a 40 grand bonus at the beginning of this year for re-enlisting with a critically needed skill in a critically needed job. five years into a ten year plan to set myself and my family up for our future. we bought a business, while i am still in the army. my wife runs the business and we live mostly off of my income. for the next several years, most of the business income will be reinvested back into the business so that by the time i get out, its already built up and well established. 

we also live below our means, but we set aside money specifically for making memories. trips, vacations, etc. i dont much remember what kind of stuff i had ten years ago, but i DO remember what i experienced. when i think back on road trips, i dont remember the kinds of snacks, drinks, and food i ate. i DO remember the conversations i had, the things i saw, and the people i experienced it with. 

this year, we may break 200 grand between the two of us. living within our means wasnt really what got us here, it was our plan. living frugally without much of a plan for growth is fine for a lot of people, but it just isn't enough for me. 

i have things i want to do later on in life, while i am still young enough to enjoy it. and i dont want to make the same mistake my parents made. my father knows what its like to try and raise a family of five on 6000 dollars a year. i remember what that looked like... several years ago, he started his own business. last year he made over 150 grand. but my parents didnt save a dime, and when tough times came earlier this year, he went bankrupt. he didnt plan. so now my parents live with my wife and i, for free, and we are paying them to help out with our business. unfortunately, they are still spending every dime they make. im probably going to start holding back some of his pay and put it into an account that he cant touch just so that he can actually build up enough money to get back onto his feet. we are also putting money aside so that we can expand the business when i get out of the army. my parents have never been one to think long term, but they are going to learn. they dont have much of a choice... they dont have anywhere else to go and nobody else in our family can afford to do what we are doing for them. 


live below your means, of course. but have a plan. have a goal.


----------



## jld (Dec 1, 2013)

200k! That is very exciting, Asla! You and Akinaura should be very proud of yourselves!


----------



## arbitrator (Feb 13, 2012)

*As my grandfather shared with me so many countless years ago while I was in the throes of my youth, money nor wealth should ever dictate one's true character or worth; that should be contained solely within the content of one's character and spirituality!

My gross adolescence and sheer lack of worldly understanding of such prohibited me from understanding what he said to me at the time, as I thought that perhaps he was either crazy i
or grossly misguided!

But in my post-formative years, I found that his words resoundingly struck so very true and I am now so thrilled to expound upon them as the given truth!

Thank you, Granddad, for having taught me that noblest and most loving message of life, although it took so many, many years to fully comprehend!*
_Posted via Mobile Device_


----------



## jld (Dec 1, 2013)

You are such a gentleman, arb. And that really has nothing to do with money.


----------



## As'laDain (Nov 27, 2011)

jld said:


> 200k! That is very exciting, Asla! You and Akinaura should be very proud of yourselves!


we are. though, im mostly just proud of akinaura. she never would have believed she could have accomplished what she has. 

she once told me that she had already proven herself to be a financial liability, and wondered why i would ever be willing to hand over so much of our financial future to her. long story short, she got on board. it took some measures from my side that were a bit heavy handed, but as she started making sound financial decisions, i started giving her more control of finances. its how things _should_ work. 

im probably going to have to do the same with my parents. they are not used to thinking with their heads instead of their heart when it comes to money. but, we control the money, so they are probably going to have to learn the same way akinaura did. and akinaura will be there to teach them. so when they are successful, akinaura will be able to feel the same kind of pride i feel for her. 

thinking about how far akinaura has come brings me a lot of joy, since i played a large part in helping her grow. i want her to be able to experience that kind of joy too. pride in herself, confidence in her abilities.

we still have a long way to go to achieve our goals. both financially and otherwise. we are building something big...


----------



## jld (Dec 1, 2013)

As'laDain said:


> we are. though, im mostly just proud of akinaura. she never would have believed she could have accomplished what she has.
> 
> she once told me that she had already proven herself to be a financial liability, and wondered why i would ever be willing to hand over so much of our financial future to her. long story short, she got on board. it took some measures from my side that were a bit heavy handed, but as she started making sound financial decisions, i started giving her more control of finances. its how things _should_ work.
> 
> ...


She has definitely worked very hard. When Akinaura sets her mind to something, it is likely to happen!


----------



## As'laDain (Nov 27, 2011)

jld said:


> She has definitely worked very hard. When Akinaura sets her mind to something, it is likely to happen!


absolutely. and the best part is, she just keeps getting better and better. 

with the right attitude, nothing is impossible.


----------



## jld (Dec 1, 2013)

As'laDain said:


> absolutely. and the best part is, she just keeps getting better and better.
> 
> with *the right attitude*, nothing is impossible.


I think the bolded is key.


----------

