Spinoff: How do you live below your means?

[Anonymous]

Anonymous wrote:

Anonymous wrote:We have a $350K HHI. Which according to DCUM is chicken shit! We actually are not at all frugal with things we like to spend on - eating out, cleaning service, lawn service, foreign travel at least once a year (10-15K), buying books, enrichment for our kids.

Here is how we live below our means.
1) Beautiful SFH with lovely yard, in a low COL area. Paid <300K for it. It is substantially less house than we can afford. And we pay ridiculously low interest rates for it.
2) Public schools. (Low housing cost meant not that great schools. Kids have always been in magnet. They are outliers with no cohort in their home school.)
3) No student debt. Parents paid for us, just like we will pay for our kids
4) No childcare cost. We managed to juggle flexible work-schedules to raise our two kids and our family helped.
5) Max our retirement, max out college saving and then save more. We live on 33% of our HHI.
6)Compound interest. When both of us were working, we invested 100% of one salary and forgot about it. We lived and saved on one salary.
7) Shop the best prices and best quality goods at Amazon, Costco etc. However, not into overpriced designer stuff. We dress very well, but we do not buy overpriced stuff.
8) Buy cars new (usually Toyotas) and use it till the end of its natural life. We do not lease.
9) No credit card debt, unless it if for zero percent interest and we can pay it off without penalty. All credit cards get paid off every month in full.

We live well, eat organic food, eat frequently in restaurants, have cleaning service, one SAH parent now, pay for 1 foreign vacation (1 week at least) for 4 of us, have Amazon Prime, entertain a lot, fully funded retirement and college, amazing medical insurance, good life insurance.

All of this is possible because we do not have the top 4 money drains in this area - high mortgage, private schools, student debt, childcare.

What does the one spouse do that makes $350k?
What a city do you live in?

Seriously. 350k single income. Yeah that makes things way easier. Plus family help with childcare, that is worth $100k easy. We had 3 kids, 5 years daycare, 1500/month. $270k right there.

[Anonymous]

If you have these two hobbies, get rid of them. I've noticed people with these hobbies waste so much money.

1. Having to have the "best" of everything. Best house, best car, best camera, etc. If shopping a lot and owning the best is your hobby, change that hobby.

2. Owning more then one vehicle per person. Like a two driver family with two cars, a motorcycle, and an antique car. The extra vehicles are like money diarrhea: you're losing money from buying the extra cars and paying for the insurance and taxes and maintenance.

It's easier to live below your means if you buy a house you can easily afford and pay off very early.

[Anonymous]

Following.

I do not live below my means but I aim to. I've been intermittently employed since last summer, and just started working after being out of work for four months. Now I earn 37k and get child support for two children that equals about 12500 a year. I left my marriage last year with no savings and used a credit card to establish myself. I have 42k in student debt and 29k in credit card debt. I also totaled my car a week ago so have to get a new one (no reliable public transport in my area) - hoping to use tax return to buy it.

Here's my breakdown:

Rent - 600
Food/toiletries/cleaning supplies - 400
Daycare - 540
Preschool - 360
After school sitter (daycare/preschool close earlier than when I finish work) - 500
Before and after care for preschooler - ~100
Phone - 93
Gas - ~100
Electric - ~100
CCs and student loans currently in deferment

Here's what I do:
-For work clothes, bought at Goodwill and in the clearance section at TJ Maxx
-Only buy sale food at the grocery store and plan, plan, plan to eliminate waste. My job provides lunch and so does the baby's daycare.
-Library and walks/hikes/playgrounds are exclusive sources of entertainment (as well as having friends over/going to friends houses)
-it goes without saying, but we do not eat out!

I feel a bit squeezed at the moment. My water's been cut off due to my not paying the bill (obviously). I just got my first paycheck Friday so will pay them Monday on my lunch break. I'm behind paying my daughter's preschool. It's stressful!

I am lucky that neither I nor my children have any medical issues nor need medication. I am lucky that I am strong and resourceful. I am so lucky to have supportive and caring friends. I am lucky to have an education and ambition and valuable soft skills that will enable me to advance professionally.

I know that a year from now things will look very different.

Anyway, thanks for the inspiration both to become better off and to stay careful with money.

[Anonymous]

Anonymous wrote:Following.

I do not live below my means but I aim to. I've been intermittently employed since last summer, and just started working after being out of work for four months. Now I earn 37k and get child support for two children that equals about 12500 a year. I left my marriage last year with no savings and used a credit card to establish myself. I have 42k in student debt and 29k in credit card debt. I also totaled my car a week ago so have to get a new one (no reliable public transport in my area) - hoping to use tax return to buy it.

Here's my breakdown:

Rent - 600
Food/toiletries/cleaning supplies - 400
Daycare - 540
Preschool - 360
After school sitter (daycare/preschool close earlier than when I finish work) - 500
Before and after care for preschooler - ~100
Phone - 93
Gas - ~100
Electric - ~100
CCs and student loans currently in deferment

Here's what I do:
-For work clothes, bought at Goodwill and in the clearance section at TJ Maxx
-Only buy sale food at the grocery store and plan, plan, plan to eliminate waste. My job provides lunch and so does the baby's daycare.
-Library and walks/hikes/playgrounds are exclusive sources of entertainment (as well as having friends over/going to friends houses)
-it goes without saying, but we do not eat out!

I feel a bit squeezed at the moment. My water's been cut off due to my not paying the bill (obviously). I just got my first paycheck Friday so will pay them Monday on my lunch break. I'm behind paying my daughter's preschool. It's stressful!

I am lucky that neither I nor my children have any medical issues nor need medication. I am lucky that I am strong and resourceful. I am so lucky to have supportive and caring friends. I am lucky to have an education and ambition and valuable soft skills that will enable me to advance professionally.

I know that a year from now things will look very different.

Anyway, thanks for the inspiration both to become better off and to stay careful with money.

I will be rooting for you!

[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??

If it's a habit, it's not painful nor uncomfortable.

[Anonymous]

We lived below our means for many years but we lived comfortably and not unlike how we both grew up so it was fine. We saved and invested a boatload. When it came time to send our kids to college we simply wrote big checks. When it came time to buy a vacation home we simply wrote a very big check. We were comfortable living below our means because we had long term goals plus we always lived OK. It just takes discipline.

[Anonymous]

Pay yourself first and avoid lifestyle inflation as your income grows. Spend money on what you enjoy but don't need to get the best of everything all of the time to impress strangers.


Then over time as your income grows, without Making major sacrifices you wake up one day making $200k HHI but living the same as when you were making $100k. You are living way beneath your means and can achieve a level of financial security most people can only dream of. Really just takes discipline,

[Anonymous]

Anonymous wrote:Following.

I do not live below my means but I aim to. I've been intermittently employed since last summer, and just started working after being out of work for four months. Now I earn 37k and get child support for two children that equals about 12500 a year. I left my marriage last year with no savings and used a credit card to establish myself. I have 42k in student debt and 29k in credit card debt. I also totaled my car a week ago so have to get a new one (no reliable public transport in my area) - hoping to use tax return to buy it.

Here's my breakdown:

Rent - 600
Food/toiletries/cleaning supplies - 400
Daycare - 540
Preschool - 360
After school sitter (daycare/preschool close earlier than when I finish work) - 500
Before and after care for preschooler - ~100
Phone - 93
Gas - ~100
Electric - ~100
CCs and student loans currently in deferment

Here's what I do:
-For work clothes, bought at Goodwill and in the clearance section at TJ Maxx
-Only buy sale food at the grocery store and plan, plan, plan to eliminate waste. My job provides lunch and so does the baby's daycare.
-Library and walks/hikes/playgrounds are exclusive sources of entertainment (as well as having friends over/going to friends houses)
-it goes without saying, but we do not eat out!

I feel a bit squeezed at the moment. My water's been cut off due to my not paying the bill (obviously). I just got my first paycheck Friday so will pay them Monday on my lunch break. I'm behind paying my daughter's preschool. It's stressful!

I am lucky that neither I nor my children have any medical issues nor need medication. I am lucky that I am strong and resourceful. I am so lucky to have supportive and caring friends. I am lucky to have an education and ambition and valuable soft skills that will enable me to advance professionally.

I know that a year from now things will look very different.

Anyway, thanks for the inspiration both to become better off and to stay careful with money.

Many people here have crumbled from way less (PEOPLE WANT ME TO TAKE MY SHOES OFF IN THEIR HOUSEEEEEE) so I admire your strength and hopeful outlook and wish you and your family much success and happiness.

[Anonymous]

I have a friend I went to high school with, and have been friends with ever since. When I say she's wealthy (not just rich) I mean for generations.

Her dad gave her the advice, after she graduated from college and was still living like a privileged post-college kid, to always remember that once you change your circumstance and live more comfortably (expensively), there is no going back. So, enjoy living in your one-bedroom apartment in a great part of town and partying with your friends. Date, have fun, hell, get a job!

She moved into a much better apartment, and ate out every night. Partying a bit. It was only after she met her would be husband that they started buying awesome houses and extravagant gifts for one another. She could more than afford it.

Interestingly, because she'd lived the way she did for so long, her husband never knew how much money he was marrying into, so she was always very secure in that he married her for herself, not the lifestyle she could provide.

Whenever I get a higher paying job, I stay at the level I was before. I get one nice, non-frivolous thing and everything else goes into savings or investments, retirement. Over the years, sure, my lifestyle has improved. Isn't that the point of workng so hard? But, I always keep to that advice. So far, so good.

I also keep things forever. That is how you build wealth. I buy the highest quality, then watch the price rise 5 years later. My clothes and shoes last forever. I have 10 year old outfits that have held up beautifully. I do not do this with my sprouting children, however, except that I make sure the quality is high enough for hand-me-downs. I get 4 years out of a $150 winter jacket by buying big, so that DC1 gets two years out of it, then pass it to DC2 for another 2 years. Excellent quality, classic design.

Also, her dad once joked in passing that he never paid interest because he always paid in full before the month was over. I follow that to a T. There's only been once in all of these years that I simply haven't been able to, and that was for a major, sudden house repair, when several things in this old house failed at the same time. I did a 0% transfer and threw money at it.

She introduced me to the glory of compound interest, which I adore. Also, the joy and importance of philanthropy. I donate outgrown, great quality, clothing, books, and toys every year. Savvy tax move, indeed. I get returns regularly, in part, thanks to this practice.

Warren Buffet still lives in the $32k house he bought a lifetime ago. This may be a small house, but I am never leaving. I am constantly shocked by how many times people invest in new, higher cost housing, bit by bit. Closing costs, the stress, moving costs, new furniture, the renovations! Single person condo, newly-married condo, first family home, second larger family home, oy! Stay where you are until you simply can't possible make it work. In the meantime, save for that forever home, with all of its attending expenses (landscaping, housecleaning, heating systems, utilities generally, no handyman on hand to handle everything for free).

Learn from the truly wealthy, the billionaires who pay no taxes. How the hell do they do it? How might I scale that down to my humble space and earn from it?

Good luck!!!

[Anonymous]

Anonymous wrote:

Anonymous wrote:Work hard to the point that there is no time left for me to spend money.
I work 6 days a week. I have a high paying job. I work a second job on the week end.
I'm always working and there is no time left for me to do anything else.
I live way below my means. I rent a bedroom in a basement for $500.
I have been doing this for 10 years. My savings keep growing.

You can’t be American, right?

I'm American.
I'm single with no children.
My goal is to retire in my 40s.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Following.

I do not live below my means but I aim to. I've been intermittently employed since last summer, and just started working after being out of work for four months. Now I earn 37k and get child support for two children that equals about 12500 a year. I left my marriage last year with no savings and used a credit card to establish myself. I have 42k in student debt and 29k in credit card debt. I also totaled my car a week ago so have to get a new one (no reliable public transport in my area) - hoping to use tax return to buy it.

Here's my breakdown:

Rent - 600
Food/toiletries/cleaning supplies - 400
Daycare - 540
Preschool - 360
After school sitter (daycare/preschool close earlier than when I finish work) - 500
Before and after care for preschooler - ~100
Phone - 93
Gas - ~100
Electric - ~100
CCs and student loans currently in deferment

Here's what I do:
-For work clothes, bought at Goodwill and in the clearance section at TJ Maxx
-Only buy sale food at the grocery store and plan, plan, plan to eliminate waste. My job provides lunch and so does the baby's daycare.
-Library and walks/hikes/playgrounds are exclusive sources of entertainment (as well as having friends over/going to friends houses)
-it goes without saying, but we do not eat out!

I feel a bit squeezed at the moment. My water's been cut off due to my not paying the bill (obviously). I just got my first paycheck Friday so will pay them Monday on my lunch break. I'm behind paying my daughter's preschool. It's stressful!

I am lucky that neither I nor my children have any medical issues nor need medication. I am lucky that I am strong and resourceful. I am so lucky to have supportive and caring friends. I am lucky to have an education and ambition and valuable soft skills that will enable me to advance professionally.

I know that a year from now things will look very different.

Anyway, thanks for the inspiration both to become better off and to stay careful with money.

Many people here have crumbled from way less (PEOPLE WANT ME TO TAKE MY SHOES OFF IN THEIR HOUSEEEEEE) so I admire your strength and hopeful outlook and wish you and your family much success and happiness.

1. get vouchers for your children's daycare, your child support is NOT included as income (that's optional, so don't claim it)
2. always call ahead when you see utilities going unpaid, they will put you on a plan
3. go to a social service agency and see what they can offer you, programs, money, low-income housing options that are not public housing
4. go to churches for free summer camp, or speak very early to community camps that charge
5. move from Goodwill to other thrift stores, preferably in wealthy areas. They donate THE BEST stuff!!
6. try you very best at your job, then get another one with good references and a great track record. You need more income!

Sending strength and blessings your way. I love the way you are holding it down, despite the challenges!! In a year, things could look entirely different. Hold onto that determination and hope. You got this!!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We have a $350K HHI. Which according to DCUM is chicken shit! We actually are not at all frugal with things we like to spend on - eating out, cleaning service, lawn service, foreign travel at least once a year (10-15K), buying books, enrichment for our kids.

Here is how we live below our means.
1) Beautiful SFH with lovely yard, in a low COL area. Paid <300K for it. It is substantially less house than we can afford. And we pay ridiculously low interest rates for it.
2) Public schools. (Low housing cost meant not that great schools. Kids have always been in magnet. They are outliers with no cohort in their home school.)
3) No student debt. Parents paid for us, just like we will pay for our kids
4) No childcare cost. We managed to juggle flexible work-schedules to raise our two kids and our family helped.
5) Max our retirement, max out college saving and then save more. We live on 33% of our HHI.
6)Compound interest. When both of us were working, we invested 100% of one salary and forgot about it. We lived and saved on one salary.
7) Shop the best prices and best quality goods at Amazon, Costco etc. However, not into overpriced designer stuff. We dress very well, but we do not buy overpriced stuff.
8) Buy cars new (usually Toyotas) and use it till the end of its natural life. We do not lease.
9) No credit card debt, unless it if for zero percent interest and we can pay it off without penalty. All credit cards get paid off every month in full.

We live well, eat organic food, eat frequently in restaurants, have cleaning service, one SAH parent now, pay for 1 foreign vacation (1 week at least) for 4 of us, have Amazon Prime, entertain a lot, fully funded retirement and college, amazing medical insurance, good life insurance.

All of this is possible because we do not have the top 4 money drains in this area - high mortgage, private schools, student debt, childcare.

What does the one spouse do that makes $350k?
What a city do you live in?

Seriously. 350k single income. Yeah that makes things way easier. Plus family help with childcare, that is worth $100k easy. We had 3 kids, 5 years daycare, 1500/month. $270k right there.

350K income came after 28 years of working in a lucrative field. We started with 40K. It would have been amazing to make 350K when we started. DH is in tech. Live in what DCUM calls Bumf**kistan. Parents gave us a huge financial leg up by covering the cost of our college.

One big piece of luck was having flexible work schedules that allowed us to not outsource childcare. + Parents provided backup when we were travelling or kids were ill. Childcare was not outsourced because of emotional concerns rather than financial ones. I think most people cannot escape this cost.

Housing and public schools were deliberate financial decisions that we took. We completely own these two choices. Of course, we had to take several other steps to mitigate the impact of bad schools, but these also paid off in the long run.

Our aim was to keep our fixed costs as low as we could. Everything else was discretionary costs. We always lived a low-key and decent life-style. So this is not a hardship for us.

[Anonymous]

Anonymous wrote:We have a $350K HHI. Which according to DCUM is chicken shit! We actually are not at all frugal with things we like to spend on - eating out, cleaning service, lawn service, foreign travel at least once a year (10-15K), buying books, enrichment for our kids.

Here is how we live below our means.
1) Beautiful SFH with lovely yard, in a low COL area. Paid <300K for it. It is substantially less house than we can afford. And we pay ridiculously low interest rates for it.
2) Public schools. (Low housing cost meant not that great schools. Kids have always been in magnet. They are outliers with no cohort in their home school.)
3) No student debt. Parents paid for us, just like we will pay for our kids
4) No childcare cost. We managed to juggle flexible work-schedules to raise our two kids and our family helped.
5) Max our retirement, max out college saving and then save more. We live on 33% of our HHI.
6)Compound interest. When both of us were working, we invested 100% of one salary and forgot about it. We lived and saved on one salary.
7) Shop the best prices and best quality goods at Amazon, Costco etc. However, not into overpriced designer stuff. We dress very well, but we do not buy overpriced stuff.
8) Buy cars new (usually Toyotas) and use it till the end of its natural life. We do not lease.
9) No credit card debt, unless it if for zero percent interest and we can pay it off without penalty. All credit cards get paid off every month in full.

We live well, eat organic food, eat frequently in restaurants, have cleaning service, one SAH parent now, pay for 1 foreign vacation (1 week at least) for 4 of us, have Amazon Prime, entertain a lot, fully funded retirement and college, amazing medical insurance, good life insurance.

All of this is possible because we do not have the top 4 money drains in this area - high mortgage, private schools, student debt, childcare.

This is us. Except we are a bit higher income. Not getting strapped down by these things (we did have childcare though for a few years) really allows for wealth to grow.

[Anonymous]

Be very, very careful taking-on fixed expenses ... long range fixed expenses - - - expenses that involve debt payment: mortgages, car loans, loans of any kind. And I would add to that tuition (tuition of any kind) since providing continuity is, in a way, an expected obligation.

[Anonymous]

Our #1 is never paying someone to do work for us. Mow your own lawn, lay your own wood floors, paint the walls yourself, put your own brakes on (dh learned through YouTube), install your own light fixtures, clean your own house. We have a well maintained, beautiful house with new kitchens and baths we did ourselves. We only hired out what was mandatory under code (like gas lines). We've saved tens of thousands.