Spinoff: How do you live below your means?

[Anonymous]

Spinoff of the other thread about secrets of rich people, what does it mean to you to live below your means? I grew up upper middle class (dad is a doctor in low col) and I always thought my parents were cheap! It meant we didn’t take expensive vacations, drove everywhere we needed to go, only went to Disney once when we were 16/22 and did a timeshare tour to boot! Now that I want to take these grand vacations I say oh damn! Flights for $1000 to Hawaii?!? Nope! What are your hacks beyond not eating $10-$15 lunches after your $3 coffee everyday!

[Anonymous]

We max out retirement and send a dedicated amount to savings/investing out of every paycheck, so we never see that money. We live on the rest. Even if we spend every dollar of the rest, we're living below our means and our net worth is growing.

The rest of what you're asking sounds like just looking for frugal tips. We take lunch most days and cook at home instead of eating out. We bought much less house than we were approved for. We shop at Costco and watch Netflix instead of going to the movies.

[Anonymous]

I agree with pp - direct deposit to accounts I cannot easily access (gen savings/investment, vacation fund, kids 529s) after maxing our work retirement funds. I put a certain amount into an account that I have a debit for and that’s all the spending money I get.

[Anonymous]

We don't really have "hacks." The important thing is to pay attention to the big money decisions (house, mortgage, cars, schools, marriage partner) and then you don't have to worry about whether someone's buying Starbucks lattes or making your own laundry detergent.

We married young, had no student loans (parents paid for my in-state school, DH went to a service academy), lived on one income and saved the other, saved a huge amount for our house down payment, paid the rest off in five years, invest half our income.

Ways we're cheap: public schools for the kids, drive cars into the ground, Costco and Walmart over Wegman's for most things.

Extravagances: boat, cleaning service, a couple moderate vacations per year.

[Anonymous]

For whatever reasons, we are simply not into big cost items. We don't need (or want) a big house, don't really want expensive cars, vacations...etc. We are completely happy living just "normal" life. We probably spend about 60k (certainly no more than 70k) per year. Probably about 25-35% of what we make.

[Anonymous]

Shopping doesn't make me happy. On the contrary, it stressed me out. I'm a minimalist and I hate clutter at home. DH's Costco trips drive me crazy because of all the crap he buys, even if it's cheaper.

Tradeoffs: our house is very plain and I dress like crap. But I just can't force myself to care (or care enough).

Many of our friends are less well off than us, which also helps, because there isn't a crazy arms race of purchasing. (It's not that we picked friends with this purpose in mind, I think we naturally gravitated toward more down-to-earth people.) Our one major extravagance is the house, not because of size, but for its location.

[Anonymous]

I agree that you need to choose wisely on the big things so that you can ignore the small things. It takes a lot of Starbucks to make up the difference if you buy too much house, have high car notes, have 3 kids in private school, etc. Also, it is obviously easier to live well below your means if your means are relatively high, so keep an eye on career trajectory and make thoughtful decisions in that regard.

[Anonymous]

- Max out retirement 401k
- Max out tax-advantaged accounts like 529 and Roth IRA
- Buy most basic items, food from costco
- Don't go shopping as an outing
- Don't go out to eat unless it is a special occasion or a social outing with friends
- Wait a day before I buy something online
- Don't have Amazon Prime
- Plan out my purchases such as travel, home improvement, clothes I want to buy for next season, things the kids need, Christmas shopping. Decide what I want to buy and how much I am willing to spend ahead of time
- When I am out shopping, like at Target, I quickly mentally add up how much the items are in my cart before I get to the cash register. This makes me much more likely to discard something I was going to buy on an impulse that I didn't need.

This sounds a little bit Spartan as I write it but it's basically habit/instinct at this point, and allows us to have other things we want, like travel or paying our cars in cash.

[Anonymous]

How expensive is expensive vacation? We went to Europe for 2 weeks and spent ca $6000 for 3. We had fun. Didn't count pennies but also didn't sleep at Ritz. We didn't go there to sleep.
Biggest "hacks" are cheaper housing and keeping cars til the wheel come off. I drive and park in DC within 2 mile radius of my home usually. the heck I need a fancy car. DH has a commuter car. The heck he needs a big car or a new car. We live in 890 square foot condo. That's all the space we need right now.
I did the saving a dollar here and there thing and it did nothing to my budget. The only good thing came of it was that I know I survive without the latte. Don't even always want one when DH is getting one.
It's the big things for me. Bought a place and rented it out and squeezed in with DH.

[Anonymous]

Our HHI was $350 when we bought our house 6 years ago. Our max house budget was $750, even though we knew that we could afford more. Now our HHI is $500+, and although we could afford a bigger and nicer house, we choose not to so that we can spend and save. In all other respects, we do not live below our means.

[Anonymous]

Separate checking accounts for fixed bills and variable spending. Paycheck goes into first account, the associated debit card never leaves the house. Funds are kept for monthly bills, 1/12 of yearly bills, plus biweekly direct deposit to savings. Everything leftover is shunted to a second checking account which is replenished biweekly. It’s the only money we “see”, if you know what I mean. Makes spending stress free.

[Anonymous]

We pay ourselves first. Retirement and investment funds get automatically deducted so we never see this money. All raises have gone to savings and we live in a modest home.

[Anonymous]

Be the first among your friends with the courage to admit Starbucks is overrated.

[Anonymous]

I'm a Dave Ramsey fan. I live by the motto " if you live like no one else, later you can live like no one else.". I keep my eye on my own business. Not what my neighbors are doing, not what my colleagues are doing, not what my friends are doing. Comparison is the thief of joy. I find complete joy and freedom in mimilaism.

[Anonymous]

Savings gets automatically transferred out, so we never see the money. We also aren't into having a huge house or a fancy new car...perfectly happy with having just enough space for our family and something reliable for commuting. If you've never had it, you don't miss it.

We lived on one income until our kids were born, so our baseline spending was always below our means.