Spinoff: How do you live below your means?

[Anonymous]

Just automate your paychecks. Also cutting on lattes isn't going to make or break people. Make wise decisions on big ticket items. If you break down what is coming in and going out that will give you an idea of the day to day and a running tab on the big picture

[Anonymous]

Anonymous wrote: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!

For us it has meant:
1) Buying a house well below what the bank said we could afford and that we could afford on one salary.
2) Paying off credit cards every month. We used them for convenience and cashflow not as credit. Between DH and I we have three, we each have a separate card and one we share (for miles)
3) Max out 401k and kids college
4) Any bonuses went to savings, kids college, large capital expenses (that we did not make unless the extra money was there)
5) Eat in most dinners and brown bag most lunches
6) Public schools (not really a choice in that we never thought about private from the start, we are more of public as the default and private if public doesn't work out)
7) We do Quicken and periodically look at our spending to see if we have any $$ habits that we have been developing- probably every 6 months.
8) We are not collectors or clothes/shoe horses. I have one purse I use all the time.
9) I think we take expensive vacations, but when I compare to DCUM, they are not.
10) We are not cheap, but frugal. We would rather pay more for quality that ends up being less expensive in the long run.
11) We buy cars new and take care of them and drive them to the end of their natural life.
12) We are lucky in that my DH has traveled a fair bit for work and we have utilized the frequent flyer miles from that and our credit card.


Before we married (and met), DH and I lived in group houses and saved our money. We both maxed out our retirement accounts early on and see the value of that. Our children have heard this over and over and understand it too.

[Anonymous]

Don’t lust for items that are bought just to make yourself look richer. Don’t spend much money on consumable goods - things that will be eaten, drunk or thrown away/discarded fairly quickly. Don’t eat out much, you’re eating your money there. Ignore the ads for expensive jewelry, make-up, clothes and cars. Shop at thrift stores/consignment stores; is entertaining and there are nice things available. Set up automatic transfers from paychecks into retirement and savings so you don’t see those amounts in your net take home. Use Quicken or some software to set up your finances so you have an overall picture, it is rewarding to see the net worth number growing over time. Take care of the things you have so they don’t need replacement. Life is easier when you have savings and don’t have to panic when a car breaks down, etc. Pay off credit card balances in full each month. And of course.....spend less than you make. With all of this, you can have a full and rich life and it will be more secure as you age, knowing you have resources to take care of yourself.

[Anonymous]

We bought a fixer upper 2 family. Fixed up the rental real nice but only did the basics for our unit. Our kitchen is horrible. No intention of renovating. Make do....

[Anonymous]

Quick and Dirty Version

We don't eat out much (That's a huge expense for most people) Two people eating out is easily 50-100 or more
Cars generally buy used people paying 40,000+ for a car or leasing is just dumb. We also keep cars for 7-10+ years
House like others have said this is the biggest way to save. It's tough in the DC region especially if you have a family and have to worry about schools
Still there are plenty of options less than 1 million with good schools and bearable commutes.

[Anonymous]

We are middle class (250K HHI). We don't do a lot of the things our friends with similar HHI do. We never eat out or get takeout, we do not buy new clothes unless absolutely necessary, most of our furniture is from stores like Value City, and we only have one car.

[Anonymous]

Anonymous wrote: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.

Why do you want to live like this??

[Anonymous]

Anonymous wrote: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.

+1. We put one spouse’s paycheck into our brokerage account. We don’t use it except to write a monthly check for childcare.

[Anonymous]

Anonymous wrote:

Anonymous wrote: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.

Why do you want to live like this??

Like what? Not the PP, but we prefer to eat home cooked foods because it is healthier- for all meals. We bought a house the fits us )~1900 sqft with a basement) and didn’t need more just because the bank said we could afford more. We don’t shop at Costco because I could never buy enough to justify the trip or the annual fee and could not find the foods the we eating quantities that we eat them.

[Anonymous]

Anonymous wrote:

Anonymous wrote: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.

Why do you want to live like this??

HUH? I'm not the poster, but we max out 2 401ks, max out our IRA contributions, direct deposit into our brokerage account, and then direct deposit into our short term savings (this short terms savings is in addition to our emergency 6 months of living expense), we then blow every penny of the rest. We no longer have to save for our kids college as that is fully funded.

Why do we do this? Because we have a good income and can provide for not only a nice today, but a nice tomorrow. Why not? Serious question back at you.

[Anonymous]

Biggest thing for me is buying the house I need and no more, not the house I ‘can afford’. My mortgage is only 5 years old, but is right about 1x my income. Could certainly have gone a lot higher but that would have been more money, not better quality of life for me or my family. A lot of other things follow from that — fewer sq ft to furnish, clean, maintain. Less pressure to upgrade. All leads to lower spending.

[Anonymous]

Anonymous wrote:

Anonymous wrote: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.

Why do you want to live like this??

Age? Net worth?

[Anonymous]

- we both work but technically we could survive on 1 pay check
- our checks are auto deposited and I just spend what's necessary
- we do public school
- We have a 2012 certified preowned van and a hatch back from 2007.
-We payed off our house in about 5 years thanks to our prior savings (both my husband and I came from low income families)
- We eat home most meals
- I mostly only buy clothes for my 2 kids - my husband still wears stuff from college. (we avg 40yo)
- vacations don't cost more than $5K/year
- Our mattress is over 10 years old.

When I last checked our net worth was just a bit below $3M. I don't feel rich, but we're both fairly prudent with spending and don't have any expensive hobbies.

[Anonymous]

Public school, only one car, drive car for 10-15 years, much less expensive house than we could afford.

[Anonymous]

I buy used cars. Always. Even when I'm better off, I will still buy used.

I buy my clothes at Goodwill, TJ Maxx/Marshalls, consignment shops. I buy everything within the same general color palate so it can all be mixed and matched. I buy high quality shoes that last a long time. I have one winter coat, one spring/fall jacket.

I pretty much only eat at home. I eat lunches "out" at work, but work in hospitality so it's free to me. I will eat out if I'm seeing old friends or am away for the weekend, but that's about it.

For housewares/toiletries/cleaning supplies, I go to discount stores.

I check out books and movies from the library. I don't drink (big money saver).

I love international travel but am putting big trips aside while I tackle debt and max out retirement. I drive to see friends, or take quick weekends away to cheap places rather than spending lots of time and money on lodging, food etc.