How do you keep dedicated to living below your means?
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Anonymous
| 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! |
Anonymous
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Suffering a job loss and having our income go from 450k to 200k was a huge wake up call. Income is back up again, but that jolted us into shape.
Everyone else can spend the hell out of their money. I predecessor to have a solid disaster recovery plan. |
Anonymous
| We try to live under our means but it's hard when everyone else is stretching or getting financial gifts from parents and living large. I love that our finances are so strong and that we're rich even though we don't necessarily look rich to others. On the other hand, there's nothing wrong with enjoying your money in the now, esp if your main financial goals are in track. |
Anonymous
| Out with someone last night who is living large. Wife made a comment that they are living on a thin edge. I don't want that kind of stress. I also know we make double what they make and we appear ou the outside to have less money. I'm fine with that. I think they are foolish. |
Anonymous
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We keep dedicated to it by making most of it automatic, taking a lot of the monthly will power out of it. My will power actually is awful and I run into cash flow issues regularly, but that is after saving/investing 30% of gross income.
Also people think I am stretched or whatever, seeing how I live a step below their consumer spending level, never would they imagine our net worth or 529s. Also I footdrag like crazy on upgrading tech and cars. |
Anonymous
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We make a lot of it automatic, too--401k withdrawals plus an additional amount into a separate investment account.
Also we invest most of our bonuses. Never, ever live as though your bonus is guaranteed. |
Anonymous
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I think for DH and me, it comes down to personality more than anything. Other influences were that all of our parents were born at the beginning of the Depression and came of age during the rationing of WWII- so their habits stuck with us. They modeled good behavior and we emulated them. We started early and kept on saving. Another influence has been that we have always made enough- although not by DCUM "standards" (HHI ~$200k including bonuses for past 10 years.)
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Anonymous
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One recommendation I have for you is to indulge yourself when you do splurge. Truly enjoy it. Savor it. Be thankful you can make that splurge without financial stress.
Over the years, I have redefined what splurging is. I've always loved buying dumb knick knacks on vacation. But last time I treated myself to a few toiletry bags that I had denied myself the rest of the year. I use these bags all the time, and see how a small splurge can make life just a little more enjoyable. And I had no problem paying my whole credit card bill that month. One example of many. |
Anonymous
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Have a clear goal - not just "saving for retirement" or "retiring early". Something like - save X so that we can retire at age X and do Y.
When you hit the goal - do what you said you were going to do. OR - have a short term goal such as fund emergency savings for 9 months and after you hit the goal say what you are going to save for next - maybe a nice vacation. |
Anonymous
You need new friends. Why do your friends know what your income is, anyway? |
Anonymous
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. |
Anonymous
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Watching savings grow is a good feeling.
And it's new to me. |
Anonymous
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I think about only *my* financial future.
These are the same people who couldn't help me if I got into a serious financial bind or even themselves. Being around (and working) older people who wasted a lot of money trying to impress people and now they're scrambling to fund their retirement account. Some friends who are only with their boyfriend so they can split finances. |
Anonymous
I find younger people do this, living like they're rock star royalty. I see it all around everyday. Then the SHTF and no backup plan, back home we go to Mom and Dad. I'll give you some advice OP, take it or leave it, it's free. Live on one income, bank the other. |
Anonymous
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And even better, live on the smaller income, while saving all of the bigger if you can. If you've been maxing 2 401ks, 2 IRAs, and steadily funding a taxable account at somewhere like Vanguard for many years now, you're already WAY ahead of the curve. Aggressively pay off your home if you feel like it.
Also, hang out on bogleheads.org. You'll find them a very like-minded group. |