Posted on 03/09/2019 7:16:36 AM PST by CptnObvious
Money Observations: Living within Your Means. The movies and Television broadcast over and over to live on other-peoples-money and to live beyond your means. But in the "Everyday Millionaires" book by Chris Hogan and on the "Millionaire Theme Hour" with Dave Ramsey, millionaires say over and over again to live within your means and to get debt out of your lives.
Indeed, I did not. for the first 20 years of work, I dabbled in credit and did not have an emergency fund. Soon I found myself living paycheck to paycheck while having a decent salary. I saw something I wanted, I whipped out the credit card and bought it even though the money was not in the bank. I was definitely not Living within My Means.
Then on the way to work I heard "Attack Debt with a Vengeance", "Live within your means" on the radio with Dave Ramsey. I listened again and went and bought his book "The Total Money Makeover" and started applying it.
One thing is that we had an income that didn't fit within the months. The paychecks were every two weeks and all our bills fell within the first two weeks. We formed a budget and a "Preload Amount" that we had to have to make it through those first two weeks. After that we could look at having some cheap fun (walking the mall and some ice cream).
What we didn't know back then is that we were starting to live within our means. We did get out of debt totally and are far better off than we deserve. But one key to staying better off is to be a "Giver" and to stay within your means.
Now while investing over $3000 a month we still stay within our means. It is now part of our lives.
It is insecurity and envy that drives this irrational impractical compulsion.
“Parents lived thru depression. Brought us up to live below our means. Have followed their advice. No debt. Paid mtge off 15 years. Buy cars cash. First job 1.60 or 1.65 hr. Cashier part time in college. Got 5 cent raise when min went up. Took home 20 wk. When cashed ck put $5 in bank. No atms.”
exactly my circumstance. I’ll add:
1. Buy really good used vehicles (like manufacturer pre-certified, off-lease vehicles) and drive them until the wheels fall off. Don’t buy the highest end lines as the repair costs are through the roof on labor and parts, particularly parts. Never buy a European car. Generally, Japanese autos and some American trucks are the best.
2. Develop repair skills and fix or repair instead of replace. That saves on the costs of new products or paying for outside repair, AND you end up with a VERY nice set of tools.
3. Do your research on EVERYTHING you buy! Both for quality and price. The Internet provides amazing resources for such research.
4. Buy high quality appliances, but never buy the highest end ones because they have too many very costly circuit boards and they don’t work any better than the next lowest line.
5. Lots of little things: cluster your errands (saves time, energy and vehicle wear); buy paper products, cleaning products and personal hygiene products and the like in bulk; pre-cool foods before freezing or refrigerating (this is easy in winter; particularly where snow is available, but cold water from the tap does a fine job by itself); don’t run the water continuously when brushing your teeth, if the climate allows; cool your house with an evaporative cooler instead of air-conditioning; buy high quality used furniture instead of new throw-away junk; haggle whenever possible and even some times when it seems it might not be possible: the only downside is someone says “no”, turn the damn lights off when you leave a room: saves on electricity and light bulb costs; the quality of LED bulbs has finally made LED bulbs worth the cost AND the output spectrums have vastly improved: there are plenty of online options for buying 3000 and 3500 Kelvin bulbs which match incandescent spectrums.
6. Limit eating out, except for special occasions. If you have time, buy high quality ingredients and cook wholesome, healthy, and delicious meals yourself. Cook very large quantities and freeze meal-sized portions to save on cooking time, setup time, and cleanup time.
7. For you youngsters in the corporate world: every time you get a raise, put the new money in your 401K/403B plan ... you won’t miss the raise money because you never had it in the first place...
8. Always live in a house less than you can afford.
9. NEVER keep a credit card balance: pay your credit card(s) off every month.
10. Don’t skimp on routine vehicle maintenance.
I’ve been frugal my whole life, but not cheap. I buy good things and I own good things. I drive good cars. I pretty much buy what i want, when i want. I eat well. I’m generous with charities (Salvation Army) during times of disaster and also make judicious donations to political campaigns ...
FASFA is worse than income taxes.
They want to know everything about your finances, everything.
You obviously need to be educated about what is acceptable or unacceptable, orthodox or unorthodox, politically correct or incorrect based on the current standards of society.
Didn’t you know you can’t do this? Where are your certifications and proof of paid for education that qualifies you to work on your own car and be non-dependent?
Didn’t you know that you can only be a butcher, a baker, or a candlestick maker? It is unacceptable to practice more than one field of trade at the same time even for yourself.
Simply put, we take 20% off the top for savings. So if my salary is $100,000 a year (to use a round number), we budget and spend as though we made only $80,000 a year. The other $20,000 is saved. A combination of 401(k) deduction, stocks, investing on Ameritrade or put in savings towards our "rainy day" money.
Other people call the above concept "pay yourself first."
It does take discipline. For instance, when unexpected expenses crop up, you are tempted to whip out the charge card or dip into the "rainy day" fund, so you don't have to give up your luxuries, but we try to absorb the extra expense within the current pay cycle by making do with less until next payday.
Recent example was my car needed new tires - about an $800 expense. Rather than put the tires on a charge or pull from savings, I paid for them out of our checking account. Normally we like to go out to eat at least 3 times a week but for the next two weeks, we ate at home and experimented with new dishes we could make cheaply, such as broccoli and cauliflower omelettes (pretty good!) and chicken thighs in cast iron pan - finished off in the oven with garlic and mushrooms (delicious). We ended up being able to pay for the tires without having to touch any of our savings or run up a credit card. And we still put the aforementioned 20% aside.
Sometimes we can't cover expenses like that, like when the roof needed to be done (we used up much of our savings for that) but surprisingly we can absorb most "surprise expenses" that pop up without losing a beat.
We are not miserly scrooges either. We prefer to buy quality durable goods, pretty close to top of the line, as they last much longer. I get most of my clothing from LL Bean - expensive but I have sweaters and shirts from them that are 10 years old and they still look good.
However, there are many things that are cheap or free that we do take advantage of. I try to get to my public library at least twice a month and I usually come out of there with 4-6 books. I explore all the local state parks and hiking trails that are absolutely free and will kill an entire weekend afternoon with zero expenditure.
Did FAFSA many years for my kids. I didn’t find it bad for two hr work well worth the 80k in free money from federal and state given over the time they were in college. FAFSA does not ask about your home great for those parents with high property values.
All good ideas.Stopped shopping in Lord and Taylor and shop in tjmaxx and Marshalls for designer stuff my kids like. But now I shop in boutique like thrift shops for myself. Amazing stuff. Past two years I have sold furnishings and clothes on consignment. They love my stuff and we have too much stuff.
Dickens had it figured out:
Mr Micawber’s famous, and oft-quoted, recipe for happiness: “Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”
Great minds and all that! (Only read first 50 replies).
We’re farmers, we get paid once a year and most of what we make is reinvested so We have always lived on borrowed money so you live cheap. I always had my “rathole” that only I knew about, it could only be used for true emergencies and saved our butts many times.
As we became more prosperous and didn’t use it, the money has grown so much we could live on it for 2 or 3 years because I still live cheap.
Cut These Monthly Expenses & Start Saving (Investing) Your Money:
1.) Cable/Satellite: $100 to $300 Per Month Savings
2.) Gym Membership: Up To $30 Per Month
3.) Starbucks: $50 Or More Per Month
4.) Cigarettes/Vaping & Alcohol: $200 Or More Per Month
“Didn’t you know that you can only be a butcher, a baker, or a candlestick maker? It is unacceptable to practice more than one field of trade at the same time even for yourself.”
yeah, i think what you said is probably somewhere in Directive 10-289 ... but they gotta catch me first ... it’s one reason I used a pseudonym on Free Republic ...
We are still in the dark ages where knowledge was privileged and controlled. Still today... expanding beyond what society deems as acceptable for your “class” is taboo.
Only ignorant followers allow themselves to be steered and suppressed in this fashion. :)
Shortly after I married, my wife suggested we start tithing. We gave it a try. I soon found I couldn't outdo God in generosity. Things stared going better for us. We didn't get rich, but we had enough to be comfortable, as well as to feed and clothe the three children that soon came along.
I'm still tithing, and living comfortably in retirement.
I established retirement accounts starting at age 22. I have always been a saver — hate debt! I have no mortgage, no car payment, no credit card debt at all. I retired in January at age 54. It IS doable, folks :)
The gov’t taxes way too much. Half your salary and then some with all the fees and other taxes. Only way I have any money was buying stocks. It will pay off my stock taxes owed from last year and any credit card debt. I hope to do better this year and finally have money going into the bank account from my paycheck instead of to the credit card companies.
A very blessed life.
Well Done! May that be an Inspiration to many!
Nice. I agree. My parents also went through the depression.
(Sorry that money split your marriage. )
My grandparents’ stories of hunting for 3 pennies to buy ice to make ice cream back in their poor days affected me. And my parents lived within their means.
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Money while putting pressure on the marriage isn’t what ended it. There were a host of other problems I and she were unable to overcome. Many marriage councilors encouraged me to not worry about the money, that it was unimportant in the grand scheme of things so I pretty much obeyed them and did what I could to manage our finances despite her lack of restraint.
Some people are just not good candidates for marriage. Selfishness displays itself in many ways, money is only one of them and perhaps far from the most damaging one in a relationship. It was selfishness that destroyed the relationship.
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