View Full Version : Do you live beneath your means?
awakenedsoul
8-15-14, 12:37pm
Do you live beneath your means? I was thinking about different periods of my life and why I was happier at some times than others. What I realized was, as long as I was saving money, everything else went pretty well. During the period of my life when I had debt, it seemed to be one long struggle. My car broke down repeatedly. I didn't have the money to fix my appliances. Property taxes, paying my accountant, and insurance bills were always a huge stress. I didn't budget for them. I started using credit cards. I also got into more arguments.
Living debt free and having an emergency fund really gives me a feeling of security. How about you? Have you always lived beneath your means?
When I was in my early 20's and just starting out, it was spend spend spend as I grew up relatively deprived and I finally was earning an income. But I didn't like the end of the month part, when I had to decide what portions of what I owed I would pay or that sinking feeling when I heard a funny noise in my old rundown car wondering if I would get stranded, and how I would afford repairs.
But then 401Ks came out, and I put a little money there. And then we wanted to buy a house, so we started saving like mad for a downpayment. Then I discovered "Your Money or Your Life" and saved even more. Now its become a habit- even when I can afford something, I think long and hard about spending my money. It has saved us through some rough financial times of either, sometimes both, of us not being able to find employment. We no longer have car payments or a mortgage, so that has given us a lot of flexibility as well as a huge amount of peace of mind.
ApatheticNoMore
8-15-14, 1:59pm
I've always lived within my means. The honest truth is I think I was never taught about debt and that getting into it was normal. Parents helped pay for what schooling I've had (not that advanced honestly). Parents gave me their old car (it was OLD - they gave me it because they bought a new car) and then later I had money for a very used car for cash (150k mileage on it). Didn't get a credit card until 26 (had a very negative opinion of them - like why would anyone actually need a credit card? makes no sense ... spending money you don't have. Now of course I see how convenient they are if you pay them off every month :)).
But the thing is that I was also never taught about saving for retirement because that was ALSO entirely UNNECESSARY for my parents generation. Because they never faced choices of whether to contribute to a 401k as they had pensions (and what did I know about pensions then? Nothing either of course as I've never worked for a company that had them). So since they had pensions most of their saving was just buying a house. So I didn't really understand why on earth I would want to do the 401k thing until 30 or so (I didn't work for many companies with matching or anything anyway fwiw, so I didn't so much turn down free money, as just not get a jump on things). Yea now I live below my means. Every paycheck some gets saved.
Yes, was always told to put money away for a rainy day. Never take a loan to buy toys, if you can't pay cash you don't need it. My parents and grandparents were self employed so no pensions for them. Both my grandfathers were pretty much retired at 60, my dad quit working at 57. I come from a long line of early retires. You have to live beneath your means for that to happen.
I have a new plan to live on 40% of my gross income. 25% will go to taxes, 10% will go to savings, 5% will go to giving, and 20% will go to debt.
I've reached a day of reckoning in my soul in which I can't play the innocent anymore. It's no coincidence that I am in the debt situation I'm in, AGAIN--after paying down almost 100k between 2009 and 2011 and then having it shoot up again, I know that while I personally have very few needs and wants, I have a character flaw when it comes to standing up for myself. I have to stop saying it's because of ___ or because of ____ . No one has held a gun to my head when it comes to some of the choices I've made in my life, and it's time I do what I heard Dave Ramsey tell a listener the other day on his radio show and grow a backbone.
Another rant (I also ranted on the healthcare forum). Today's my rant day.
awakenedsoul, I hope you don't think I'm hijacking the thread.
I retired when I was 36, 15 years ago. We try to live below our means so that we remain retired :-)
That said, I just signed a promissory note for my daughter's college loans (no financial grants :-() for about $300k, which was terrifying in a way.
We do, though it's getting a bit tighter these days. We certainly did before I left work/retired. But we brought expenses way down (that time/money trade again). We did, however, add in a few new ones: additional life insurance for DW, more medical insurance since I was no longer covered by my work, monthly contributions to Roth IRAs, etc. But it has not yet gotten to the point where I need to get a McJob. So we're OK.
iris lilies
8-15-14, 6:56pm
I've always lived below my means. Always.
In fact, I remember during the first or second year of my first professional employment, discovering one month when I had spent more than I made that month. My response was: ACK! And I never forgot doing that.
But I didn't have a general credit card until I was about 30 years old. They were hard to get. I remember applying for one for the purpose of building up credit so that I could buy a house, and I was turned down. I though that was ridiculous because I was saving $500/month. That was a lot of money back then, $500/month.
I didn't have a car payment or school debt. I was debt free. So living below my means wasn't crazy hard.
gimmethesimplelife
8-15-14, 7:08pm
I'd love to say I'd always lived beneath my means but no....big fat no. That would be a lie. There was a period during the real estate boom here when I was making very good money and yes it's my fault entirely that I didn't save much of it - and I went on a spending spree. It seemed like for awhile there as a waiter - though the work was hard, I was being showered in tips. There was a Macy's at the mall I worked at where I spend far too much money - it was as if for the first time in my life I could afford some things so I went overboard with it. That's essentially what brought me here, the stress of credit card debt and the fact that nothing I bought really did make me happy.
I salute and respect all of you who saved and saw through consumerism at an early age - more power to you! I'm not on that list but at least I'm close to debt free other than my half of the mortgage and I am saving every month. So there has been progress and I am grateful for that. Rob
awakenedsoul
8-15-14, 8:46pm
Thanks for all the replies. I lived beneath my means when I was dancing professionally. When I was teaching, and once I bought my home, that's when I started to struggle. All of a sudden I was paying for my own health insurance, trash collection, water, property taxes, accounting fees for my Schedule C, and repairs. And boy oh boy, did I have a fixer upper! It was such a shock. Those costs really add up.
So, now that I have the debt paid off, the house in good shape, and a nice emergency fund, I am very cheap. I just don't want to go back to that stress. I am conservative in what I spend.
Catherine, I don't think you are hijacking the thread. I think debt is a very negative forcefield. It sounds like you have been over responsible. It seems like debt attracts debt, and savings attracts savings. I always believed the saying work breeds work. One of my student told me, "Money follows money." I like that.
This giving up having a car is one of the freakiest things I've ever done. It's weird how psychological finances are. I've been starting the year with $28,000. and having $8,000. left over at the end. So, I'm living beneath my means, but I'm still getting used to all the lifestyle changes that come with aging, careers, and home ownership.
Anyone else?
Lived below my means all my life, bought only what could be paid for on one income and saved along the way all the nickels and dimes that I could and still do which really add up. I figured any money that I saved by careful and thrifty choices was money earned tax-free.
frugal-one
8-15-14, 9:18pm
I have always lived below my means or have been frugal. I remember in high school, my mother commenting that I was very careful with my money and only bought things I REALLY wanted. She actually called me "tight". I have never had the desire or understood the desire to spend more than you earn. Wonder why that is?
iris lilies
8-15-14, 11:56pm
I have always lived below my means or have been frugal. I remember in high school, my mother commenting that I was very careful with my money and only bought things I REALLY wanted. She actually called me "tight". I have never had the desire or understood the desire to spend more than you earn. Wonder why that is?
My mom said the same thing about me. She was proud of it, it wasn't a negative thing. But still being a mom had to push me sometimes and say "hey, spend that money! live a little!"
I still remember two objects I bought when shopping out with her and I always hated them. One was a coffee table, one was a bedspread. I didn't need either one of them, and that was back in the days where I really didn't know my "taste" or style, or rather, could only stand to buy low end things. The table was a trendy thing that quickly became outdated, and the bedspread was a country style thing that were in colors I didn't even like.
Back then I was better off just doing without, it made me happier than low end objects I didn't even like.
We have always lived far below our means. The excess was not needed unless for a far future date for security. We have done this for over 40 years and it is ingrained.
Even now, I will be in my exercise class in good yoga pants but wearing a $2 Tshirt which is clean and without holes etc. I am getting comments that I should go and buy some "better" or more fashionable exercise clothes. Who needs better things to sweat in?
We try to spend on things that are important or give us the most pleasure. My husband buys Dewalt tools for his volunteering with Habitat and a ramp building group and I search out inexpensive fabric for making donation quilts. But I dont buy the latest and greatest fancy sewing machine or more tools (and there are a lot always a lot coming to market.)
As a couple we do live within our income. We have a saying, he earns it, she spends it. It's partly true. My dh does have a regular part-time job and is paid into an account from which we (I) pay all our general living expenses - giving, rates, power, insurances, car expenses, groceries, phone account and some of our wants such as outings. It's more than enough for all these purposes and we are just allowing the balance to build up. We also each have a part time business, and spend our own money wherever we see fit.
I hate debt and have only ever entered that state in order to buy our house and paid off that mortgage as soon as we possibly could never to go into debt again. Sometimes our income has been minimal, but we just tightened our belts during those periods so as to keep expenditure within our means.
rosarugosa
8-16-14, 7:55am
We always lived just within our means - we pretty much spent as much as we made until my "aha moment" about 6 years ago. Now we are saving diligently!
My mom said the same thing about me. She was proud of it, it wasn't a negative thing. But still being a mom had to push me sometimes and say "hey, spend that money! live a little!"
I still remember two objects I bought when shopping out with her and I always hated them. One was a coffee table, one was a bedspread. I didn't need either one of them, and that was back in the days where I really didn't know my "taste" or style, or rather, could only stand to buy low end things. The table was a trendy thing that quickly became outdated, and the bedspread was a country style thing that were in colors I didn't even like.
Back then I was better off just doing without, it made me happier than low end objects I didn't even like.
Seems frugality might be a personality trait you're born with.
I may have already told this story here before, but it's case in point:
When I was in your home town, IL, with my kids for the 3 months we were on the movie set, we lived IN Union Station (you know the mall I'm talking about), and my kids were 5 and 6, just when the "gimmees" are in full swing. I knew I had to have some order and rules, because they couldn't escape all the cool things they might want.
So I gave them each a $5 a week allowance. DS6 would ALWAYS ask for an advance on his allowance, then buy something and quickly abandon it for the next shiny thing that caught his eye.
DD5, OTOH, saw a Little Mermaid pencil case at the Disney Store the very first week we implemented the allowance. It was $30--it had all kinds of buttons you would push and compartments would come popping out. For SIX WEEKS she faithfully put that five dollar bill away in her billfold. When she saved it all up and had the $30, we went downstairs (literally) to the Disney Store. She went up to the pencil case and grabbed it and then stopped. She looked in her wallet. She looked at the pencil case. She looked in her wallet. And she put the pencil case back and never bought it and actually went back East with the $30 intact.
She's still really good with her money, but she's loosened up a bit. However, her ability to live within her means has enabled her to live VERY inexpensively and work as a freelancer doing what she loves. Needless to say, I'm really proud of her.
kimberlyf0
8-16-14, 10:13am
We live below our means, and have for a long time now, but we didn't when we were younger.
ToomuchStuff
8-16-14, 1:23pm
When I first bought my house, it was pretty close to at my means. (savings were allocated for known upcoming bills, like taxes/insurance) If living above your means, means, strictly not going into debt, when then I failed that, because I would use my CC to buy house fix up stuff, as I found it at a good price/on sale, etc. and then when all the stuff was there for the project, I would be paying it off, while spending my free time working the project. (free time either finding the bargains, or providing the labor) I think the longest I went was 6 months of buying as I found, and CC was paid off, within three months time. (short term loan, paying whle finding means entire time could be 9 months)
I did go through a period of no working (due to surgery) and then when I went back to work, I went from being a witness in a suit to a defendant (against a couple of deep pocket companies). That left me just short of bankrupt. (just missed being homeless and/or bankrupt) After that, my only goal was to pay off the house (never thought about retirement, expected to be dead by 30, not sure by whose hand). When I did that, I started saving a lot more and while I do live below my means, I am working on improving that. (while now saving for retirement since I lived longer then I expected to)
awakenedsoul
8-16-14, 2:13pm
Thanks for all the replies. Now that I'm experimenting with going car free, my expenses will be lower. The more I cut back, the more ways I find I can reduce what I spend. Taking the bus and using the bike is making it easier to live beneath my means.
I never realized it when I bought this cottage, but it is ideal for retirement. It's small, in an ideal climate for growing food, close to all public transportation, and a single story. Our city is flat, so it's easy to bike when running errands. Having your first home be your only home saves money, too! Well, unless you are making money on your sales...
kimberlyf0
8-16-14, 2:41pm
I never realized it when I bought this cottage, but it is ideal for retirement. It's small, in an ideal climate for growing food, close to all public transportation, and a single story. Our city is flat, so it's easy to bike when running errands. Having your first home be your only home saves money, too! Well, unless you are making money on your sales...
Our home is also close to ideal for retirement, something we weren't thinking about when we bought it 14 years ago. Then I wanted a single story because I'd already been living in a two story condo and my second child was about to go mobile and I just didn't want stairs, but a single story is also very nice when one is older. Our walk score is 83, which is "Very Walkable" and is pretty amazing for the metropolitan area we live in; we are within walking distance of the post office, medical and dental offices, the library, parks, the civic center, the outdoor concert venue, and more (including shops and restaurants which don't interest me too much). We can walk to Trader Joe's or the grocery store in 17 minutes (of course it's even quicker by bicycle). Public transportation isn't fantastic, but the light rail should be here before we retire.
P.S. I hate that I am a junior member, lol. I was a very active member a long, long time ago on the old boards.
We have a great growing climate too; I know people like to say that California isn't a season, but it kind of is ... :)
We almost "upgraded" our home a few years ago, and got as close as making an offer, but then it went bidding war and we bowed out. We realized that we would be giving up so much just to get a bit more space and a bigger yard, and then the kids would be gone in a decade and we'd be stuck in a big house in an area of town that required driving to go anywhere. No thanks! We decided that staying here and continuing to live beneath our means made far more sense.
awakenedsoul
8-16-14, 3:07pm
That sounds great, kimberly. Location makes such a difference. Yours sounds ideal. The light rail would be wonderful...We have a fabulous bus system. The buses are all brand new, air conditioned and super clean. They run on natural gas. It's a good feeling to have "all of us together" making use of the system. (I would always drive around by myself in my car. I feel better not wasting the gas and money.)
It's smart that you were thinking ahead with your house. I see so many people my age that have too much home once the kids leave. Usually it's too much work to move. My parents both would have liked to live in Carmel during their retirement, but with all of their stuff, they couldn't do it. The thought of moving was overwhelming to them. My mom is having a very difficult time with the stairs now. The bedrooms are all on the second level.
What I have is like a 1940's grandma's cottage. I'm about a mile from the library, post office, movie theater, drug store, and grocery store. I can bike there or take the bus in a very short time. I didn't think about those things when I bought the home, but they sure do save money! I am grateful now!
Blackdog Lin
8-17-14, 8:48pm
We very much live beneath our means - it is what enabled me to retire at an early age, and stay retired without having to have a paid job.
But it is mostly a function of age, with us. In our 20s and 30s we didn't do it as well. As we got older we realized we prized time and peace more than money and possessions.
awakenedsoul
8-17-14, 11:17pm
Well said, Blackdog Lin. I think saving is kind of a muscle. It's so easy to spend.
I would say that we live within our means. We could save much more and there is a lot of things I would really like to save more on. But we don't have any debt and I cannot imagine what would have to happen to force us to accept a debt as a solution.
We also do have some money saved for 'emergencies' so e.g. broken refrigerator or washing machine could be replaced and paid for in cash. We don't have credit cards.
I used to put money aside and save what I could for future ... things, security, whatever ... and I have restricted experiences and pleasures available at the moment. Now, being married to someone more than 20 years my senior is teaching me to find some balance. There are things that we have to do now or in near future if we want to do them at all and if we save enough money to afford them than we spend that money and enjoy it.
I don't expect much from the far away future and while I am saving into retirement fund and I like having some emergency fund that would cover household repairs and help us if we got ill ... I am no longer restricting spending on some things as long as it's within our means. We spend vacation hiking in the mountains or biking, sign up for races, we have paid for Dylan's and Blackmore's Night concert tickets just recently (how many more times will they come here?), go skiing in winter, give kids opportunity to travel, buy quality equipment for our hobbies ... We are finding ways to do things cheaper but we are not denying ourselves experiences that we really value. I don't want to stand here 15 years from now wishing we have bought that good bike and went for a wonderful vacation in mountains instead of having extra 20 000 crowns (that has lost third of it's value) in bank. I am glad we have spent the money, had fun together and that we have great memories and motivation to save for something else. And once we do, we'll spend that money again and make it worth it.
We are finding ways to do things cheaper but we are not denying ourselves experiences that we really value. I don't want to stand here 15 years from now wishing we have bought that good bike and went for a wonderful vacation in mountains instead of having extra 20 000 crowns (that has lost third of it's value) in bank.
I think that is an element of frugality that many people gloss over. Frugality, to too many people (who aren't practicing it) equates to being "cheap". If it were presented as "why pay more than you have to for stuff you don't care about so you have more money for the stuff you do care about?", I think people would identify more with the behavior.
This fall, DW and I are joining friends for a cruise to the Panama Canal. We love visiting new places, and none of us has ever been in to Central America/South America. It will be our first real vacation in three years. We're staying in an inside cabin and we don't spend ourselves silly on the ship (all you have for currency is a piece of plastic; the day of reckoning comes later). We're going to have a good time (I hope; norovirus, get thee behind me!) and not worry about it. That's why we save money elsewhere!
awakenedsoul
8-18-14, 1:58pm
I was thinking about some of the things I splurged on last year, and reevaluating if I still would have spent the money. At that time, I was assuming that my car would last another ten years. Now that it's died, I've been questioning myself, "Should I have spent $3,000. on the trip to NYC to see all my friends at the My One and Only cast reunion? It was incredible. Very emotional and moving. So, yes, I'm glad I went. I also thought about the $3,000. high end refrigerator that I bought. I could have gotten a basic Kenmore for under $1,000. I'm glad I spent on both of these purchases. I paid cash and budgeted for them. If I hadn't spent that money, would I now be buying a used car? I'm not sure. I was not aware how much car prices had gone up. I think after this month, though, I probably won't be splurging any more this year. I'll be saving.
Enjoy your vacations! I LOVE travel. You can't put a price on it. It can be harder to do some of things as you get older...
I spent my early adult life living at or beneath my means--except for the saving part, which I never "got the memo" about. Then I married a spendthrift and quickly adopted his same bad habits. When we divorced, I was completely broke, but had gotten addicted to still trying to impress people I didn't know with money I didn't have, and that got me further into debt. It was "Your Money or Your Life" that triggered the extraction process of my head from my--er--posterior, and took years of digging out of debt once the penny finally dropped, so to speak.
Now, DH and I live beneath our means AND are saving for our future. It's a great feeling! I've learned to search for high-quality, well-made items that for whatever reason are far below retail price (e.g. used, overstocks, etc.). I've also learned to repurpose things like clothes and furniture that I find or get in thrift stores, make my own jewelry, do my own hair and beauty treatments, and become a far better (and more frugal) cook. I really like the way we live now, and I NEVER want to go back to those spendthrift days, no matter how much designer crap I had! :)
I've always lived below my means even as a kid. Use to save a big part of my little allowance "for the future" or save money from any jobs I had as a kid. Of course "for the future" often meant I would spend all that savings once it accumulated to a fairly large amount on something I really wanted to have or do at a later time. But that was OK. Pretty much kept to this principal my whole life and, irregardless of my income (high or low) always lived well below my means.
I live below my means. I think I always have also . I remember saving 5 cents a week allowance in the late 50's to buy a little tea set. I saved the 30 cents and then decided it was too much money to spend on that (I was probably 5 years old) and didn't buy it. I always had savings. I also have never been too into stuff. I usually think quite a while before I buy something. I never needed all the clothes, makeup etc that most younger girls need. I chose not to have children. When I was younger my favorite vacations were camping and hiking, which were both inexpensive.
When I was married we saved his check(which was more) and lived on mine. Occasionally we would dip into that savings to buy something like a no extras car. I was marred for about 19 years and have been divorced about the same. When I was working I continued to save about 1/4 of my take home pay. Now I live on the results of those savings. I am grateful that I did save. I got to the point where I had too much back pain to continue working and I was in a position where I could make that decision. Not working has really improved my chronic back pain.
Awakensoul, I hope your car less future works out. It would be quite hard to do that where I live.
awakenedsoul
8-18-14, 7:20pm
Selah, It took me a while to dig myself out of debt, too. I love finding nice second hand furniture and clothing. I do my own hair and nails, too.
Spartana, That's great. My dad is like that. I think the key is to do it, as you said, regardless of your income. I used to spend more when I earned more. That was before I started tracking my expenses. I wasn't conscious of what I was spending or earning.
Aqua Blue, I feel the same way about buying a used car as you did about the tea set. That's great that you are living on the results of your savings. I'm actually surprised at how easy it is to live without a car here. But, I've been driving so little the last three years, it's not much of a transition. I couldn't have done this when I was still working. I'm going to write out a new budget, and add up all of my deductibles. I need to organize exactly how much money I need for living, deductibles, and a possible car fund, if I change my mind. I just don't want a car payment. And, I'd rather use public transportation, since it's so affordable. The yarn harlot's blog made me feel better about falling off my bike yesterday. She's a little younger than I am, and she fell off her bike TWELVE times in one day! Yet she raised over a million dollars for AIDS on some bike a thon she does every year. I wonder if hormones affect balance...
Gardenarian
8-18-14, 7:29pm
Yes, we make a lot more than we spend. This summer was an exception - I took off work and traveled - but that's because I knew I could spend the money and still, averaged over two years, come out ahead.
awakenedsoul
8-20-14, 8:21pm
Gardenarian,
If it's not too personal, how much more do you make than you spend? (I mean percentage wise?) I've been reading the Early Retirement Extreme blog and forum posts. Many of them save over half of their income. I know you're property has gone up in value, too. Home values are rising again here, too. I'm finding I can spend much less as I get older.
Glad to hear you got to take some time off and travel!
Gardenarian
8-23-14, 3:02pm
We spend roughly 40% of our current income.
In addition, DH and I have both come into recent inheritances and I plan to retire from my regular job pretty soon. We will also downsize when DD (15) is off on her own, and our house has increased mightily in value. So we have both a good income and capital behind it.
I'll continue working in some form or other after I retire - I just don't want to be tied to a job/schedule any longer. My dh says my spirit animal must be a Jack Russell Terrier - I like to be busy :)
awakenedsoul
8-23-14, 5:07pm
Wow! 40%!!! That's fantastic. You've really got all your ducks in a row. It helps to have all of that discipline in place before you inherit money. Then you can protect what you have and build wealth.
San Onofre Guy
8-24-14, 1:46am
I am in a period in which most months we spend more than our income, but with two boys age 18 and 20 with their own vehicles and college costs, I can live with it. The two months a year with an extra paycheck and annual sickles vid payoff cover the deficit. I have planned for this day and have a six figure investment Ccount so while I don't like months of deficit spending, I have the resources to cover and life is meant to be live didn't it?
We average 55%; we have been binge savers for the last 5 years. :)
Ed
awakenedsoul
8-24-14, 10:26am
San Onofre Guy, My father used to say, "Children are relatively cheap, until they turn 18." That always made me chuckle.
eleighj, That's great! It's amazing what that kind of savings can do. I feel totally different now that I'm shifting my percentage of what I save upward. I just feel so much more relaxed.
" have planned for this day"
That's the way to do it!
I survived 3 kids high school and college years with minuscule savings and some deficit spending as well. But it's all paid off now. During that time I told myself that these are the expensive years but it will pass. The money flowed like water ...
I survived 3 kids high school and college years with minuscule savings and some deficit spending as well. But it's all paid off now. During that time I told myself that these are the expensive years but it will pass. The money flowed like water ...
Me too Tammy. I only had one kid but was a single parent with no child support after age 9. I wish someone had said that to me at the time because there were years I felt I wasn't saving enough and would never catch up. Well, duh, of course! So the empty nest years are the time to re-pad the bank account.
Gardenarian
8-25-14, 4:19pm
We're lucky that dd's grandparents created a college fund for her - so no worries there.
kimberlyf0
8-25-14, 6:00pm
We recently decided to start an extreme early retirement savings goal. To get there, we're currently saving about 50% of take home, plus what goes into the 401K, but we'll have to back that off next January since we need to max out the 125 FSA for another kid's braces. Although really it is all the same, the 125 FSA is still a form of savings account, and if we didn't have it we'd have to hit the regular savings account for the braces. Our goal is to live on as close to half of take home pay as we can for the next 14 years; of course we'll hit the savings account for capital improvements, cars, and college.
You would really enjoy http://www.frugalqueen.co.uk/. Her frugality is famous and she is an interesting blogger. She even now does radio in Cornwall on frugal living.
awakenedsoul
8-27-14, 8:33pm
Tammy, That's impressive! It's true that some times in life require more money, (especially if you have children.)
Lainey, I felt that way in my 30's, too, and I was single! But, I'm also able to save more now. It's such a relief.
awakenedsoul
8-27-14, 8:35pm
Gardenarian, How nice. That makes things much easier. It puts you in the position to do the same, too.
sweetana3, I checked out the blog. Thanks for posting it. I love reading about people who live frugally and happily. (Especially in Europe!)
awakenedsoul:
Great question! Most months I do live below my means. Once in a while I will have to tap into savings (dog needs a tooth removed or something) but I try to replace it (the money, not the tooth!) soon after. Though being financially literate is something new to me. I really only got into frugality and such about two years ago. Long story; I'll spare you! haha
But something that your original post here touches on that is quite a captivating idea is this: "I was thinking about different periods of my life and why I was happier at some times than others."
I think back like this too! The answers I get from the wisdom of 20/20 hindsight really informs the future lifestyle I hope to design for myself.
In college I lived in a small apartment (330 square feet) with my girlfriend. We had friends over for potlucks. We walked almost everywhere. We went to the park for fun. I didn't have much more than a sleeping roll, a guitar, and my books for class. Those were amazingly enjoyable years! I worked part time and lived on lentils and rice, fruits and veggies from a nearby farmer's market. Times were good. My life was simple -- not without pain or hardship sometimes -- but simple and overall good.
Now I try to model many aspects of my life along those lines. While my hobbies and interests have changed I think there are some overarching lessons I can learn from this lifestyle. My only regret is all the student loan debt! lol
Ultralite, you mentioned in another thread how much student loan debt you had. What kind of degree, master's, doctorate? And how is your earning potential to getting that debt paid off quickly (I know you also mentioned threats of lay-offs). Was the loans used only for school expenses or also living expenses? Did you realize what you were getting into every year when you signed another loan? Is it all consolidated or are you making several payments a month? I only ask because so far both boys have money to pay what isn't covered by financial aid/scholarships. One son is going to a very expensive private college and will run out of money in 2 years. The other is going to a private college but less expensive than the first sons and should have enough for 4 years. Both will have to borrow for masters.
Float On:
I have a BS, an MA (American Culture Studies), and an MLIS (Library and Information Studies). My income is $45k at the moment before taxes and deductions of all sorts. If I work for 10 years for the government (such as the university I work for now) and I make 120 payments then the remainder of my debt will be forgiven. So I just need to do roughly ten hard ones workin' for the man! haha
And hopefully during that time the politicians don't take away the Public Service Loan Forgiveness plan. hahaha
When I was young I just did not understand the ramifications of my loan-taking. It did not seem real to me. But now it sure seems real! hahahaha
I consolidated and I am on income-based repayment. It is about $360 a month for me under this plan.
Your sons are probably more financially literate than I was. I was rather oblivious when I was younger. I did not understand money at all. Reading Your Money Or Your Life a couple years ago really helped change my perspective. Also, Jeff Yeager's Ultimate Cheapskate books were helpful too.
Thanks for being transparent. :)
We may be able to help the boys monthly with some spending money but failed at saving college funds for them. Thankful for the MIL who invested money for each grandchild. I had no idea that a $5000.00 investment could grown into $38,000 + but that is what happened so they have a good start.
adding: All the college apps were a bit sneaky about Parent plus loans (no thanks, I can't be left with a bill for their education) and were also sneaky about stating that "with your loans, you'll only be responsible for x amount"...no loans are not financial aid.
Live and learn. Ya know? I tell myself that college and grad school were a form of "pretirement." hahaha
And I did have a wild time!
We have always lived way below our means. I think we saved well over 30% a year for over 30 years. But we had the benefit of being a two income couple with no kids and fairly limited wants/needs.
Neither of us particularily cares about popular culture or keeping up with anyone else. My dining room set is from 1975 when we moved here from Alaska. Our cell phones are the old flip phones and only really used to call each other.
Our biggest issue currently is getting new wills and maybe a trust set up.
Awakened, you and several other commenters have really highlighted the way that money and psychology are related. I love your phrase "negative forcefield." That is exactly what debt is.
I have a schizoid money personality. It is amazing to me that I have never been in debt because I have spent awe-inspiring (not in a good way) amounts of money on clothing. Since joining Mint it's become horrifyingly clear to me exactly how much. And I'm trying to do better on that. At the same time, I have always avoided spending money on property and cars, going to almost crazy lengths to avoid buying a car and I think those strategies have saved my butt financially. Also, I never had pets and never had collections of things. AWAKENED, if you can manage to remain car free you will love what that does for your finances!!! Go you!!!
It is just great to see so many people posting thoughtful self-reflective comments here, great thread.
I wish we lived beneath our means. At one time we did and had a very healthy savings and budget. Now sadly it's paycheck to paycheck for this season.
I really only got into frugality and such about two years ago. Long story; I'll spare you! haha
l
Ultralite, we won't force you, but I guarantee that the people here don't want to be spared the story.
Tussiemussies
7-9-15, 11:53pm
We are saving a little bit of money but still have a lot of work to do on our home, and regular chiropractic visits and some other necessities, we aren't saving much. My husband just got a raise which we will put toward the debt we have from having a new roof put on...and we also are going to put money away when my husband has some good months with his side business. I believe we are living within our means but not below them...we spent quite a lot of money when we were younger, I wish we weren't spendthrifts and would have start saving right away like some others here!
Williamsmith
7-10-15, 5:52am
It's important to me to be careful about spending but balance that with living in the moment. Concentrating on the future through savings can be restrictive to the point of sacrifice. Sacrifice for a purpose is good but not so good when it's done for the sake of just saying you denied yourself. I've lived within my means and the more experienced I get the more I want in a savings account for unexpected events. That said, I have used debt as a way to borrow against future potential income in order to satisfy my urge or need to own something now. I don't think that's wrong but it certainly isn't a good strategy for living beneath your means.
Living beneath indicates you are under the weight of something. If you are single, it's much easier but if you share with a partner you have to realize you are asking them to share the weight of the load. You exchange some freedoms for a partnership. That means living a little more riskier than you'd like. Like a nice gas fireplace insert which I Have just figured will cost me 465 hours of work to pay for. Discussion time.
Yes we do. Being debt free makes that possible. We live on 43% of what we make. We make mindful spending decisions-we don't go without and we don't live in austerity. We arrived here the hard way.....via near bankruptcy 28y ago. Growing up through our 30's, 40's and now 50's spit "keeping up with the Jones's" right out of our reality. YEA! As a wise woman said years ago....
"now that i can afford broccoli, I'd rather grow it":cool:
Ultralight
7-10-15, 7:25am
jp1:
Okay, when I got divorced I did not know what my bills were, how much they were, how to pay them, or anything like that. My former spouse did all that (and not especially well because sometimes I would find out that bills had not gotten paid). But I was the one working and making most of the money. Sometimes she'd not be employed at all or part-time, though she did have a full time job for perhaps a year and a half or our 11 year relationship. I also had nothing saved for retirement -- keep in mind I was about 33 at the time of my divorce. I did not know what a 401k was. I did not know what an IRA was. I did not know what a mortgage was. To me a mortgage was like electrolytes. I would hear people talk about it but be like: "What the hell is that?!" haha Though I'd never ask because I did not want to look stupid. haha
My parents did nothing to prepare me for financial life in the real world.
One day just weeks after my former spouse packed her bags and left my sister and her husband sat me down and made a spreadsheet for me. It had my bills and rent and income and whatnot in it. They gave me a "come to Jesus" speech about personal finance. At that point it dawned on me that I needed to get it together. So I read Your Money Or Your Life, started listening to some Dave Ramsey shows, and reading Jeff Yeager's Ultimate Cheapskate books. Over time I began to understand money a little better. Now I have a 401k, an ARP, and a Roth IRA. Granted, they are not overflowing with cash yet. But better late than never.
Delving into minimalism and voluntary simplicity has helped me to save up a decent emergency fund too. I also learned some basics of how to cook so I am not going out to dinner everyday like I used to. While I don't like cooking, I can usually make something tasty enough to avoid the temptation of ordering a pizza or going to the Indian buffet. haha
Since I was never materialistic or interested in stuff, the part of not shopping at the mall for clothes, toys, or gadgets is easy. I am also a bit of a Luddite, no cell phone at the moment! haha. My main problem is hobbies. I will get interested in something and be very, very tempted to spend money on the gear and such.
freshstart
7-10-15, 4:52pm
this may sound silly, but I was wondering in the back of my head, "is he saving for retirement? or is that not a minimalist thing to worry about?" So I am relieved to hear you have a plan! Are you still in your 30s? That should give you time to "catch up". What is an ARP?
Ultralight
7-10-15, 5:06pm
freshstart:
I am 36. Maybe I can catch up. But I think that the economy in the US will be so "third world" by the time I reach retirement age that the best I can hope for is to work part-time rather than full time.
An ARP is an Alternative Retirement Plan that the university I work for offers. It vests after one year instead of five like the traditional pension they also offer. I elected the ARP because, when I started, I was 35. I am not married and I have no kids. So I thought: "A lot can happen in five years. It is probably best to select the plan that vests in one year, so if something happens in the next 4 years and 364 days I can still leave and take the money with me."
But I think simple living is part of my "retirement" plan. Have you read http://www.amazon.com/How-Retire-Cheapskate-Way-Cheapskates/dp/0307956423?
Good book for someone like me.
rosarugosa
7-10-15, 6:39pm
Jake,
Jeff Yeager was one of my first guiding lights on frugality/simplicity. I'm glad to hear he struck a chord with you too.
awakenedsoul
7-10-15, 8:01pm
awakenedsoul:
Great question! Most months I do live below my means. Once in a while I will have to tap into savings (dog needs a tooth removed or something) but I try to replace it (the money, not the tooth!) soon after. Though being financially literate is something new to me. I really only got into frugality and such about two years ago. Long story; I'll spare you! haha
But something that your original post here touches on that is quite a captivating idea is this: "I was thinking about different periods of my life and why I was happier at some times than others."
I think back like this too! The answers I get from the wisdom of 20/20 hindsight really informs the future lifestyle I hope to design for myself.
In college I lived in a small apartment (330 square feet) with my girlfriend. We had friends over for potlucks. We walked almost everywhere. We went to the park for fun. I didn't have much more than a sleeping roll, a guitar, and my books for class. Those were amazingly enjoyable years! I worked part time and lived on lentils and rice, fruits and veggies from a nearby farmer's market. Times were good. My life was simple -- not without pain or hardship sometimes -- but simple and overall good.
Now I try to model many aspects of my life along those lines. While my hobbies and interests have changed I think there are some overarching lessons I can learn from this lifestyle. My only regret is all the student loan debt! lol
Yours is an interesting story, UltralightAngler. I think many artists feel that way. When I was traveling all the time as a dancer, I owned very little. I was fine sleeping on a mattress on the floor, listening to music on a boom box my friend didn't need anymore, and eating at a card table with folding chairs. When the contract was up, I didn't have any furniture to move. I just gave it to the next dancer, as it had been given to me. I spent most of my time in dance classes and at the theater, anyway.
I have simplified my diet and it's not only better for the budget, it's better for me. I'm sleeping better, feeling better, and moving with more ease. This diet is far less expensive. So much of what we spend is habit.
Once I bought my house, my spending really changed. suddenly I had a new series of responsibilities. I love having a home, but it has shifted my priorities.
awakenedsoul
7-10-15, 8:09pm
Awakened, you and several other commenters have really highlighted the way that money and psychology are related. I love your phrase "negative forcefield." That is exactly what debt is.
I have a schizoid money personality. It is amazing to me that I have never been in debt because I have spent awe-inspiring (not in a good way) amounts of money on clothing. Since joining Mint it's become horrifyingly clear to me exactly how much. And I'm trying to do better on that. At the same time, I have always avoided spending money on property and cars, going to almost crazy lengths to avoid buying a car and I think those strategies have saved my butt financially. Also, I never had pets and never had collections of things. AWAKENED, if you can manage to remain car free you will love what that does for your finances!!! Go you!!!
It is just great to see so many people posting thoughtful self-reflective comments here, great thread.
Thanks Rachel. I'm enjoying hearing these stories, too. It's funny, even though I should be spending less, (since I no longer have a car,) in actuality I'm spending about the same amount. I traveled to see my mom when she was dying, and attended a reunion with old friends in New York. I paid cash for both trips. As I get older, I'm realizing that if I don't see people now, I might not get to see them again. It still keeps me in budget to ride the bus, though. I've also had some unexpected expenses like medical bills for my bike accident, and paying cash to see a top doctor for my hip. It's worth it to me, though. Again, I had the money saved in my emergency fund. I'm always surprised at the unexpected expenses that come up each month. As long as I keep a lid on the other stuff, it works out fine.
freshstart
7-10-15, 8:12pm
freshstart:
An ARP is an Alternative Retirement Plan that the university I work for offers. It vests after one year instead of five like the traditional pension they also offer. I elected the ARP because, when I started, I was 35. I am not married and I have no kids. So I thought: "A lot can happen in five years. It is probably best to select the plan that vests in one year, so if something happens in the next 4 years and 364 days I can still leave and take the money with me."
But I think simple living is part of my "retirement" plan. Have you read http://www.amazon.com/How-Retire-Cheapskate-Way-Cheapskates/dp/0307956423?
Good book for someone like me.
That you have a pension plus 401k is great, most employers are dropping defined benefit pension plans. Mine did, after 20 yrs full time, it was worth 30k or like $200-300 a month in retirement. I know so many people who never did the 401k because they thought we had a "good pension". They sent a statement every year showing how little the pension was worth and still employees never did anything else until the pension was gone. Scary.
I will have to look into that book, thanks
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