How do you keep dedicated to living below your means?

[Anonymous]

I hang out with people who make way less money than I do. It helps control entertainment spending/limits going to expensive restaurants.

I bought a reasonably priced house for my income and still drive my 10 year old, ugly car. Occasionally I get the urge to upgrade my car (my coworkers all drive BMWs and audis, so my car sticks out). However, then I remind myself that my friends couldn't care less what I drive and I may as well get as much mileage out of my current car as I can.

I have a goal monthly extra mortgage payment. As long as I can meet that goal, I figure any leftover money is "fun" money. For the new year, I plan to spend a little more money on myself (yoga, massages, etc). I used to hate spending money on these things because they are expensive and unnecessary. But whatever. I am a little tired of being so frugal, so I'm loosening up a little. I should still be able to retire early and pay off my house early even if I spend a few hundred bucks a month of myself.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I'm the PP who posted about saving all of our bonuses. I've seen WAY too many people in our types of job (spouse and I both have jobs where bonuses and incentive pay are part of income) that live really large in a few good bonus/incentive years and then can't maintain their lifestyle when the bad years come along, or struggle to do so.

Sales family here. We are the same way. Just got my last check and I made 90k in base and 195k in comission. I save all, but 25k of that comission.

DH is in sales as well and we live in his base as well. We live in a different world as compared to our colleagues. However our income can be a roller-coaster or we can easily get fired without ceremony of we don't hit goal and we'd prefer to have to suffer a job loss without any financial stress.

Agree! We live "below" our colleagues for sure! It makes even more sense because B2B sales in our work often depends on a few big clients, so it's high risk, high reward.

[Anonymous]

We also live way below our means but surrounded by people who make less. We love our friends and neighborhood and as a bonus we always feel we are doing very well financially when there aren't as many Joneses around to keep up with.

[Anonymous]

I got really good about wants vs needs. Ex... do I really need another pair of jeans when I already have several in my drawer that still look and fit just fine? No, so it's a want and I'll walk away. Do I really need another pair of jeans because the ones I have don't button? Yes, so its a need and I'll buy it.

[Anonymous]

We have a 250 HHI and live on about 1/2 that. It is not that we deny ourselves but just don't want that many things. Our house is paid off and we should be able to handle college (2 kids). I drive a 15 year old car (which cost 12K needs) which runs fine. When it stops meeting my transportation needs I will replace it. Some people might be itching for a new car. I don't care.. DH and I almost never exchange gifts. I guess I don't have any suggestions other than attitude.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The DCUM secret is a really high HHI. Really easy to live on one income of 150K+ and bankroll the second. This doesn't really apply to couples each making 50K.

We weren't born rich. We didn't graduate from college debt-free and walk into a $100k job. But, whatever. Sounds like you've convinced yourself you've got it all figured out. Basically, it's easy for everyone else but hard for you. Ok.

Actually, I've been there and done that. I increased my paltry income and was able to live below my means as a result. It's really easy to do so while making 6 figures.

[Anonymous]

Lost my biglaw job in 2010. I had saved most of it (this was pre-kids and I grew up working class) and ended up fine, but was absolutely blown away by the number of fellow laid off associates and income partners who couldn't last much more than 2 or 3 months after the severance ran out. So, I don't put much stock in appearances. It is entirely possible to live a fairly luxurious life fueled primarily by debt, and who's impressed by that?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The DCUM secret is a really high HHI. Really easy to live on one income of 150K+ and bankroll the second. This doesn't really apply to couples each making 50K.

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We weren't born rich. We didn't graduate from college debt-free and walk into a $100k job. But, whatever. Sounds like you've convinced yourself you've got it all figured out. Basically, it's easy for everyone else but hard for you. Ok.

Actually, I've been there and done that. I increased my paltry income and was able to live below my means as a result. It's really easy to do so while making 6 figures.

I agree with you, generally. Sometimes life throws you huge curve balls, though. A parent who did not prepare well enough, or develops dementia and moves in with your or you need to subsidize things for them. A child with special needs. A family member or spouse who develops a serious mental illness. Other things need to adjust for as you go. Stuff happens that seriously eat the bankroll.

[Anonymous]

I'm learning a lot from this thread. Great tips!

In case this is helpful, I can offer the perspective of someone who only recently began living below our means.

DH and I have an HHI of $325,000 with two full-time incomes. We were not living a fancy lifestyle, but we were spending most of our income every year (except for maxing out 401(k)s). We didn't have an emergency fund and still had student loans and some credit card debt.

In 2014, we decided to try something new -- living below our means.

Now that it's 2016, I see how much peace of mind I have! I am genuinely less stressed than I was when we spent everything. I am amazed at how much joy I get from knowing that that nice big emergency fund is there.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My DH and I try to live below our means. This year we bought a house that cost way less than we could afford. We're still driving old used cars. Etc. I'm usually pretty good about resisting peer pressure. I'm a lawyer and our HHI is over 300k and have friends kind of balk about our vacation (cheap, local) and other choices and point blank ask me why I don't upgrade considering my income. Our goal is financial independence, earlier retirement, funding kid's college fund -- those kinds of things -- rather than a nicer house, cars, whatever. Occasionally I find it tough to resist the pressure -- like I find myself obsessed with renovating this or that when it's not necessary and probably a bad investment at our home's price point. My question is -- if you have similar goals to us, what do you tell yourself to keep yourself in line?? I usually pull myself back from the brink but it's tough to stay disciplined. Tips welcome!

You need new friends. Why do your friends know what your income is, anyway?

They ask! Which I do find kinda tacky (esp. Because it's pretty easy to google what a biglaw person makes so I wish they'd just do that insead of making it a convo) but no one's perfect.

Your motivation to live below your means should be that you're in biglaw and could get cut at any moment.

[Anonymous]

Anonymous wrote:I'm learning a lot from this thread. Great tips!

In case this is helpful, I can offer the perspective of someone who only recently began living below our means.

DH and I have an HHI of $325,000 with two full-time incomes. We were not living a fancy lifestyle, but we were spending most of our income every year (except for maxing out 401(k)s). We didn't have an emergency fund and still had student loans and some credit card debt.

In 2014, we decided to try something new -- living below our means.

Now that it's 2016, I see how much peace of mind I have! I am genuinely less stressed than I was when we spent everything. I am amazed at how much joy I get from knowing that that nice big emergency fund is there.

Congrats! What specific changes did you make? And how much did you wind up saving per year (outside of retirement)? I'm looking for tips/inspiration!

[Anonymous]

We also live below our means. HHI of 350K but we save about $160K in retirement, college, and regular investments. So we spend about $100K. Our mortgage is 3k.

[Anonymous]

We live below our means, but, we like to spend on things we enjoy. We splurge on books, hobbies, food, entertaining. We find immense pleasure out of that. I guess we do not really care for high-end stuff, and could not be bothered to buy designer anything.

[Anonymous]

Keep your fixed cost low.

If you have a very high mortgage, student debt, high car payments, private school costs - you cannot really save anything.

[Anonymous]

(1) I don't talk to anyone about my HHI. I just recently left biglaw and I realize associate salaries can be googled, but if the topic comes up I shrug and go with "I don't know" no matter what the question, precisely so as not to say actual numbers so no one can later say -- you can afford x, y, z.

(2) Was in biglaw for 8+ yrs -- didn't get laid off but knew I wouldn't make partner so I had to get out. It wasn't at all surprising given the state of biglaw and I knew that if I didn't make it -- any other option -- smaller firms, in house, gov't all pay less. So the motivation was -- save as much as you can so that your savings are in great shape if you ever get downsized.

(3) I don't particularly care what people say about me. In my circle it's all about cars and I have a "regular" car -- i.e. a Toyota/Honda/etc. kind of sedan and have had people say "get a REAL car" meaning luxury, I kind of shrug and say whatever. They don't pay my bills, I do. They can piss their money away if they want.

(4) I always think that people at our income ranges have incredible savings -- i.e. retirement is in great shape; not working for a yr wouldn't be a huge stretch etc. And then I've seen the reality -- people talk about how are barely contributing to a 401k or aren't contributing; they freak out if they have to leave biglaw and go in-house where they will "only" make 150-190k and I decided I don't want to be in that position, if I can help it.