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View Full Version : Could you live this cheaply...and save this much?


disneysteve
08-04-2006, 12:30 PM
http://ca.pfinance.yahoo.com/ca_finance_loans/11/how-we-paid-off-our-house-in-three-years

For all those who think they couldn't possibly save anymore and there is no way to get ahead, here's a good story. These folks lived on the bare minimum and saved 80% of their pay. They bought and paid off a home in 3 years. Granted, they earned a substantial income, but they also worked their tails off to do so. Not everyone could be as extreme as this couple, but I think there are some good lessons there.

There was also an article in MONEY this month about a family (with kids) who vowed to not buy anything new (with a couple of exceptions) for an entire year. Everything would have to come from thrift shops, flea markets, trash picking, hand-me-downs or borrowed. Again, an extreme route to go but evidence that living on a lot less than most of us currently do is very possible if you really set your mind to it.

MyGoofy26
08-04-2006, 12:35 PM
My aunt used to work with a girl that kept $20 cash from her pay for gas (remember those days when $20 would pay for 2 weeks of gas?) and saved the rest. Of course she was living at home and presumably eating her parents' food and all that. . . but she was making decent money (x-ray tech) and refused to get married until she could pay cash for a house.

Free4Life11
08-04-2006, 01:07 PM
I couldn't in any way shape or form. 20% of my income wouldn't even cover my rent for the year, let alone utilities and food.

BillSears
08-04-2006, 01:15 PM
I couldn't in any way shape or form. 20% of my income wouldn't even cover my rent for the year, let alone utilities and food.

He played with his numbers quite abit. That 80% savings was 80% of take home pay and included in that 80% was money spent on his house, cars and other assests and paying off debts. So really it wasn't 80% savings it was closer to 80% towards an increase in positive net worth.

Personally I couldn't ever see myself working 14 hour days for 99 days straight.

lnh'smom
08-04-2006, 02:10 PM
I wouldn't even want to work 14 hour days for 99 days straight. I am all for saving money but you have to have a life too.

MrsPete
08-04-2006, 02:35 PM
These folks lived on the bare minimum and saved 80% of their pay. They bought and paid off a home in 3 years. Granted, they earned a substantial incomeThis is essentially what my husband and I did for the first few years of our marriage. Our income was lower than theirs, so we couldn't have lived on 80% of it, but our thought process was the same.

Like this couple, I agree that it was well worth it. I'm glad we did it, but I don't want to do it again.

MrsPete
08-04-2006, 02:36 PM
My aunt used to work with a girl that kept $20 cash from her pay for gas (remember those days when $20 would pay for 2 weeks of gas?) and saved the rest. Of course she was living at home and presumably eating her parents' food and all that. . . but she was making decent money (x-ray tech) and refused to get married until she could pay cash for a house.I would be supportive of my children, if they made this choice! A good start in life puts you so far ahead.

MrsPete
08-04-2006, 02:37 PM
I couldn't in any way shape or form. 20% of my income wouldn't even cover my rent for the year, let alone utilities and food.I couldn't have done it when I was a starving college student either! At that point I had to spend everything I had just to survive; the key, however, was that I never, ever spent more than I had.

Laurajean1014
08-04-2006, 02:39 PM
I have 8 more years left of my 15 year mortgage and I'm happy with that. We sock some $$$ away for savings, 401k, 529 fund and put extra $$$ to bring down the mortgage quicker. I'll be in my early 40's when my mortgage is done, and that's good for me.

I can't do it all, but at least I'm doing it my way and enjoying it.

MEM
08-04-2006, 02:44 PM
[url]
There was also an article in MONEY this month about a family (with kids) who vowed to not buy anything new (with a couple of exceptions) for an entire year. Everything would have to come from thrift shops, flea markets, trash picking, hand-me-downs or borrowed. Again, an extreme route to go but evidence that living on a lot less than most of us currently do is very possible if you really set your mind to it.

Is this article part of a series? I did not see it in the on-line MONEY -- only in the print issue? There is a book out that has a similar premise - the woman was on Oprah during the Debt Diet Series -- the book is called "Not Buying It" - I took it out of the library and was very disappointed - sorry to say but it was, IMHO, an ultra-liberal diatribe masquerading as a book on personal finance. I would be interested to hear what others who read it think about it.

dvcgirl
08-04-2006, 02:47 PM
Interesting article. I think we could save another 10% if we had to with our present committments, but we live pretty lean as it is. I just calculated our net savings, I always calculate using our gross pay, and using that number we save 40%. We save 55% of our take-home pay, not including the match from my DH's employer on his 401K. Our "must haves" or all of our bills including anything to do with the house, utilities, all insurance, transportation and groceries is 26%. So our fun money/travel expenses is at 19% of our take home pay. We're perfectly happy at this level so I'm not sure how much lower I'd like to go. But if we *had* to...sure we could save more.

kinntj
08-04-2006, 03:57 PM
Yes, that's pretty strict. I could have done that when I was young though (just out of college age). I wouldn't dare do that now unless things were really dire. I worked 2 jobs for quite awhile when I lived alone and some days I was burned out, but while you're young you have the ability to do it short term.

We save 10-15% while I stay at home, but in 3-4 years when I start working I'll be saving 100% of what I make and still try to save at least 10% of DH's.

We also agree to put his raises in savings/investing for now. That will definately help. I'm frugal on certain things and other things I'm not, so we could save more if we wanted. We're fairly comfortable right now.

We get Money magazine, so I did see the article on the family not buying much of anything new. Very interesting.
I could see DH and I doing something similar for awhile just to save up excess for furniture we want or a vacation, but nothing long term.

CarolA
08-04-2006, 05:09 PM
I have a former friend whose husband is EVERY bit this cheap, but not NEAR this motivated. However, they save 100% of her take home pay and a chunk of his. Thier house is paid off etc.

(And they are MISERABLE and have very few folks who will spend ANY time with them. They don't understand why none of us want to listen them WHINE about how much everything costs. They don't understand why some of us think the fact that they had their children in the WORST child care situation we ever heard of was bad... after all it was cheap. They don't understand why thier "friends" don't think a night out is kids meals at Mickey Ds.)

For folks like this I think it is as much about "attention" (The author brags about HOW much he worked, don't you bet everyone heard about it. And let's NOT discuss the QUALITY of work you give your employer...)

I also think it's a disorder just live overspending. "In all things moderation"

dvcgirl
08-04-2006, 05:27 PM
Well, the author of this article did say that it was crazy....I think he was just trying to point out that it could be done. Working 90-100 hour weeks for three years would make living on 20K a year fairly easy I suppose.....if all you do is work there is no time to spend money.

pearlieq
08-04-2006, 05:32 PM
I've been thinking about this article all day.

To be honest the "lean years" sound miserable to me, but what a place to be now! It got me to thinking, what kind of boost could DH and I get if we really just bucked down and took 2 or 3 super lean years? What would we be able to accomplish?

Right now we save plenty, but we also have a lot of fat and luxuries in our budget. What if we gave them up for couple of years--how much would that net us? Would it be worth it?

I know I'll be playing with numbers tonight. It's a very interesting idea...

sk!mom
08-04-2006, 05:51 PM
I think that it is great idea although extreme. DH and I did something similar in our first few years out of college. We continued to live in an apartment and share a car while we retired our college debt. We were not this extreme but those super frugal years are the major reason that we were in such great shape by our early 30's.

If others would try something similar we wouldn't read so many posts of people over their heads in debt. A few years of sacrifice can pay off big.

disneyfreakk
08-04-2006, 05:55 PM
honestly, this wouldnt be all that hard to do. Alot of people make it on $24,000 a year. Why would it be hard to live on $2,000 a month when that doesnt count your morgage or car payments?? Especially if they didnt have kids, and I dont think they did. I am also guessing that they invested into their 401ks or equivilant every month too! Very smart of these people IMO! :thumbsup2

dvcgirl
08-04-2006, 06:06 PM
I've been thinking about this article all day.

To be honest the "lean years" sound miserable to me, but what a place to be now! It got me to thinking, what kind of boost could DH and I get if we really just bucked down and took 2 or 3 super lean years? What would we be able to accomplish?

Right now we save plenty, but we also have a lot of fat and luxuries in our budget. What if we gave them up for couple of years--how much would that net us? Would it be worth it?

I know I'll be playing with numbers tonight. It's a very interesting idea...

I think that's big prize....getting that debt out of the way so early in your life...it just gives you a huge advantage in the future.

Aimeedyan
08-04-2006, 06:19 PM
This kind of story really motivates me to look at our finances and figure out how we could live SUPER lean for a couple of years to get that much farther ahead. I think one of the biggest things that couple had going was that they had the same view on finances. DH and I come at things differently and though I will crunch numbers and approach him with the concept over the weekend, he will be a hard sell. He is much more interested in living life now, you know? Not that that is wrong, I feel that way sometimes too, but the payoff of being debt free and having a substantial savings BEFORE we have our first child seems worth it to me.

Thanks for the read!

LuluLovesDisney
08-04-2006, 08:53 PM
honestly, this wouldnt be all that hard to do. Alot of people make it on $24,000 a year. Why would it be hard to live on $2,000 a month when that doesnt count your morgage or car payments?? Especially if they didnt have kids, and I dont think they did. I am also guessing that they invested into their 401ks or equivilant every month too! Very smart of these people IMO! :thumbsup2

I agree.

BillSears
08-04-2006, 08:59 PM
honestly, this wouldnt be all that hard to do. Alot of people make it on $24,000 a year. Why would it be hard to live on $2,000 a month when that doesnt count your morgage or car payments?? Especially if they didnt have kids, and I dont think they did. I am also guessing that they invested into their 401ks or equivilant every month too! Very smart of these people IMO! :thumbsup2

Yep he had $80,000 a year going towards debt reduction, savings and asset(house and cars) building. Therefore he had $20,000 in take home pay to live on during the year, that's $20,000 free and clear and house and car payments didn't come out of that. Not too bad really.

Now I'd be impressed if he could "save" 80% of his pay if he only made $40,000 a year gross. It becomes real easy to start saving large percentages of your pay once your pay is higher then the usual costs of living.

disneysteve
08-04-2006, 09:35 PM
If others would try something similar we wouldn't read so many posts of people over their heads in debt. A few years of sacrifice can pay off big.
This is the take-home point I got from the article. We read so many posts from people who claim to have cut all they can cut who still can't make ends meet. If you're making minimum wage, that may well be true. But if you are making closer to median income, chances are there is still a lot you could cut if you really wanted to. And you probably could work more if you really wanted to. There are almost always jobs available. They may be lousy work for lousy pay during lousy hours, but they are still jobs and they still give paychecks.

I would love to really shave our spending for a while, but I don't think DW would go for it. Even though she is quite frugal and definitely onboard with our savings and long-term goals, I don't think she would be willing to go that extreme. Of course, we are in our 40s now and have a kid so our priorities and perspective are different than they were when we got married 14 years ago. We're at that point now where we are starting to enjoy a little higher standard of living while still being able to save a high % of our income. We don't need to stay at the Econo-Lodges anymore. We've graduated to the Fairfield Inns. And we've gotten spoiled with rental properties - we leave tomorrow for a week in a chalet in Vermont. It is absolutely a luxury, but we can afford it. We could have stayed at some cheap motel and saved about $1,200 but we just don't have the desire or incentive to do that since we are already debt free except for our home.

Maybe I'll bring up this topic on the drive tomorrow since we'll be on the road for 8 hours. ;)

tinaluis
08-04-2006, 10:18 PM
Very interesting article, Steve. I agree that it is easier to save such a high percentage of income when you have that much to begin with, but I've also seen people who make that much who blow it all and live paycheck to paycheck with no savings to speak of. DH and I have both agreed that we will save 100% of his income when he returns to work (after our girls are grown) and wish we'd had the "clarity of vision" to do this when he was working before we had the girls. As they say, hindsight is 20/20. My best hope is that we can influence our girls to be thrifty and approach savings/investing the way we've learned to approach it (without having to go through the "School of Hard Knocks" ;) . I'm glad to have the information now, but sure wish I'd had someone talk to me about finances when I was very young and just out of school. My parents ALWAYS struggled with money and never even owned their own home. In fact, when DH and I were buying our first home, a loft, they tried to discourage us from doing so because they didn't really "get" the idea of a condominium. I'm glad that we scraped together enough for a down payment and closing costs because it was the stepping stone we needed to get into the single family home we're in today. Thanks for the link to the article, Steve. Enjoy your trip!

sk!mom
08-04-2006, 10:53 PM
I would love to really shave our spending for a while, but I don't think DW would go for it. Even though she is quite frugal and definitely onboard with our savings and long-term goals, I don't think she would be willing to go that extreme. Of course, we are in our 40s now and have a kid so our priorities and perspective are different than they were when we got married 14 years ago. We're at that point now where we are starting to enjoy a little higher standard of living while still being able to save a high % of our income. We don't need to stay at the Econo-Lodges anymore. We've graduated to the Fairfield Inns. And we've gotten spoiled with rental properties - we leave tomorrow for a week in a chalet in Vermont. It is absolutely a luxury, but we can afford it. We could have stayed at some cheap motel and saved about $1,200 but we just don't have the desire or incentive to do that since we are already debt free except for our home.

Maybe I'll bring up this topic on the drive tomorrow since we'll be on the road for 8 hours. ;)

I have to side with your DW on this. We did that just out of college and have now been debt free other than our mortgage for years. Now that we are in our 40's I would not want to do it. Travel is very important to us. We also have a DD10 and I would not want to cut back on the extras that she enjoys.

However once she is grown, I can see us becoming very frugal again except for travel. DH and I have already discussed the possibility of going back to one car when we no longer have a child at home.

MrsPete
08-04-2006, 11:05 PM
But if you are making closer to median income, chances are there is still a lot you could cut if you really wanted to. And you probably could work more if you really wanted to.That's the moral I took away too. For the great majority of us, I see it this way: we have two choices. We can scrimp and save when we're just starting out in the world, then with some frugality we can be relatively sure of being comfortable for the rest of our lives. Or we can spend without much thought, and play "catch up" financially for the rest of our lives.
Of course, we are in our 40s now and have a kid so our priorities and perspective are different than they were when we got married 14 years ago. We're at that point now where we are starting to enjoy a little higher standard of living while still being able to save a high % of our income.Yep, we're in the same age bracket, and things are different once you have children -- that's another reason why I think it's so important to "begin well". I don't want to be forced to postpone things during the few years my children are at home.

MrsPete
08-04-2006, 11:12 PM
However once she is grown, I can see us becoming very frugal again except for travel. DH and I have already discussed the possibility of going back to one car when we no longer have a child at home.My husband and I anticipate doing similar things. With two children (and always their friends!) we enjoy the space of our big house; however, neither of us enjoys housework or yardwork, so we're planning to downsize to a condo when they're grown. When the girls both visit with their families, we'll rent them hotel rooms -- it'll be less expensive than keeping up a large house.

We had only one car for the first three years of our marriage, and there's no question that we'll go back to one car after we're both retired. (Can't do it until retirement: He works 8-5 in the big city, while I work 7-3 near our home.)

At the same time, we're planning to spend more on travel during retirement. We're looking at buying into Marriott Vacation Club, and we might also buy a T@b trailer. We're also interested in being able to do more mission work with our church once we're retired.

MrsPete
08-04-2006, 11:16 PM
Yep he had $80,000 a year going towards debt reduction, savings and asset(house and cars) building. Therefore he had $20,000 in take home pay to live on during the year, that's $20,000 free and clear and house and car payments didn't come out of that. Not too bad really.Ah, but it was the self-discipline that impresses me. Most people who earn 100,000/year spend 100,000/year -- or more. 20,000 isn't poverty level, but it's far from luxury living. It'd not be easy to sit at home watching network TV, eating boxed mac-and-cheese, with the air conditioning turned way up KNOWING that you had a large amount of money sitting in the bank.

disneysteve
08-05-2006, 07:39 PM
I have to side with your DW on this. We did that just out of college and have now been debt free other than our mortgage for years. Now that we are in our 40's I would not want to do it. Travel is very important to us. We also have a DD10 and I would not want to cut back on the extras that she enjoys.
I agree. I didn't mean I wanted to be as extreme as the folks in the article. Just that I wouldn't mind trimming back a few of our luxuries back to where they were 10 or so years ago.

barkley
08-06-2006, 08:02 AM
i know it can be done-but it can come at a large cost in the way of time and energy to implement some major 'cost cutting' efforts. relying on garage sales, thrift stores and the like for clothing/houslhold goods purchases means seeking out and finding those things you need-so unless you luck into hitting a sale that happens to have what you need right off the bat there can be hours/days of going from sale to sale and store to store seeking out your necessities (maybe not as difficult with an adult only household-we don't tend to outgrow clothing but with kids it can be a more pressing issue). as far as grocery shopping goes-unless you've got one or two stores that you can easily compare prices at and go with the cheaper alternative-running all over town to multiple locations in search of the best price can end up costing alot time and gas wise. meal wise-if you go from more expensive prepared foods to 'homemade' theres a preparation and time element in cooking involved, so that has to be figured in. so i think a person has to consider what their time is worth.

i have to think that part of the reason the person in the article was successful was because he had a 'partner' (wife) who supported his efforts in more ways than the article explored. working multiple jobs with insane hours and no days off for months at a time means the work of laundry, shopping, meal preparation, bill paying, cleaning, yard upkeep/home repairs, auto maintainance... is falling on someone else. i might have had the energy to do this when i was single/newly married-but absent of someone able/willing to take on all the work of the above items it would not have been possible.

we recently simplified our lives and as a result are able to save a much larger percent of our income. but we did that by selling our home, taking advantage of a tremendous amount of equity and paying off all of our debts (the remaining funds which were 400% more than our debts went into the bank for a future home purchase when we can take advantage of a better buyer's market). but there are some 'luxuries' (in the minds of many) that we choose to continue to have because when we balance the cost in terms of time and energy expended as well as long term investment of materials and upkeep we end up saving by hiring them out. a key example would be yard work. we live in rental with close to 12,000 square feet of lawn, trees, plants, bushes....to keep it up would mean investing in mowers, trimmers, ladders, weed abatement sprayers, edgers...and would entail several hours of work per week. we opt to have a service come in and do everything on a weekly basis for around $60 per month. a 'luxury' for some-beyond the financial savings it frees up hours that can be better used for other pursuits. we opt to have expanded satelite service-costly, but as compared to renting movies, going out to the movies or other entertainment venues with the kids it's much more cost efficient. it just comes down to both short and long term savings for us.

i have a family member who has lived a very bare bones, watch every penny, save as much as you can lifestyle for decades. and he managed to live entirely off his moderate overtime income and bank every cent of his regular salary. yes, he managed to save enough to pay cash for his 3 kids to attend high cost private universities, but the cost emotionaly for his nuclear and extended family (in my opinion) has not been worth it. his kids have a very strained relationship with him by virtue of spending only a few hours per week with him (and those in pursuit of those bargain deals), he has alienated friends and family from himself and his children because his minimal 'free time' was always directed at supporting his bare bones existance so it has never been 'worth it' for him to maintain/facilitate these relationships. and-those times when he did interact with family/friends-it was very uncomfortable because he was so focused on shareing his knowledge of cost cutting, bargain hunting...people were made to feel guilty for sharing memories of vacations, school activities and anything he views as a non necessity.

so, in my opinion-if you're going to adopt that lifestyle, take into consideration the non financial cost of these efforts and the impact they will have on both you and the people you care about.

dvcgirl
08-06-2006, 08:15 AM
My husband and I anticipate doing similar things. With two children (and always their friends!) we enjoy the space of our big house; however, neither of us enjoys housework or yardwork, so we're planning to downsize to a condo when they're grown. When the girls both visit with their families, we'll rent them hotel rooms -- it'll be less expensive than keeping up a large house.

We had only one car for the first three years of our marriage, and there's no question that we'll go back to one car after we're both retired. (Can't do it until retirement: He works 8-5 in the big city, while I work 7-3 near our home.)

At the same time, we're planning to spend more on travel during retirement. We're looking at buying into Marriott Vacation Club, and we might also buy a T@b trailer. We're also interested in being able to do more mission work with our church once we're retired.

This is very similar to our plans...except, we don't have kids. We already find that we're just naturally more frugal as we get older. We enjoy the exercise of looking around our house, around our lives really, and seeing what we have that we just don't need. We'll downsize our house in the future...no doubt. We'll likely go down to one car. We could actually do that now because my DH works from home, but he also works in technology so his job stability is never exactly iron clad. So, we'll keep the other car..at least the mileage will stay very low.

I told my DH about the article that Steve posted. His initial reaction was..."oh, we could totally do that if we had to.." And he's right, we could save 80% if we really had to....thankfully we don't have to though ;o). We'd have to give up travel completely, all of our fun money actually....and trim our monthly expenses too. Not much fun in that kind of life.

btass
08-06-2006, 09:42 AM
[QUOTE=kinntj]We also agree to put his raises in savings/investing for now. [QUOTE]


I have been putting my raises into my 401k for the last 3 years. My expenses have not really gone up that much for me(in my own way) to warrant taking the extra money now, so I figured that would be a great way to get the retirement fund into high gear. And I don't miss the money because it wasn't there before I got the raise.

ptrbryant
08-06-2006, 10:17 AM
[/QUOTE]Now I'd be impressed if he could "save" 80% of his pay if he only made $40,000 a year gross. It becomes real easy to start saving large percentages of your pay once your pay is higher then the usual costs of living.[/QUOTE]

Exactly what I was thinking! The amount of money they spend (20% of their income), when adjusted for mortgage payments and car, is about what our real income is! How much could they scrimp from that point on?

Karla B.

gina2000
08-06-2006, 10:18 AM
I believe in balance and the lifestyle of that couple in no way, shape or form represents healthy balance. As another poster said, the time spent looking for bargains can put severe strain on family relationships. I used to have a boss who, by his own admission, was "so cheap he squeaked". He loved it. His kids thought his salary was at poverty level. They got nothing extra, ever. He did pay for their college educations but I think the disservice of few new life experiences was counterproductive to the family unit and put great strain on relationships within the family. Whatever he leaves his children will be spent immediately in a frivalous fashion. And I can't blame them. The pendulum swings in both directions.

TDC Nala
08-06-2006, 11:09 AM
I dunno...if I saved almost everything I made what would I do with it? I don't have kids to send to college or leave an estate to, I put as much as I can into the thrift savings plan already and I don't need a bigger cash cushion for emergencies than the one I already have. I don't have debt except for my condo and my line of credit on the condo. I guess I could pay off the condo, but why would I want to?

I'd rather spend what's left and entertain myself.

barkley
08-06-2006, 11:14 AM
i dunno-we never did without as kids, but dad being a young adult in a family of 13 with a widowed mom during the depression certainly did not believe in 'wasting money'. vacations were largly trips to visit family, the summer trip to the beach/boardwalk was always with mom because he did'nt want to take vacation time off work that he could accrue and earn retirement credit for. i remember he was very concerned about 'the future' and preparing for it.

my dad died when i was 19 and mom has been comfortably financialy stable for the past 25 years as a result of his planning. but more often than not when my kids are talking to her about some vacation we've done or one they are looking forward to, or some activity their dad took the day off work to come to-she gets wistful and says that she wishes they (she and dad) had'nt been so focused on the future and had taken the time/opportunity to enjoy the present. she will say 'we were always saying that when had what we thought was enough set aside we'de go here or there with you kids, or alone when he retired-but by the time that rolled around you were all grown and then his health prevented it, if i had it to do over-i'de settle for a little less financial secuirty and a lot more 'fun memories'".

Barak's Disney
08-06-2006, 11:36 AM
Neat article! Thanks for the link!

eliza61
08-06-2006, 11:58 AM
Lord, it's not even about could I live this way but why would I ever want to!..working 22 hours a day, 7 days straight. Not going to help me much if I die from a heart attack at 44.

Interesting story.

rockyroad
08-06-2006, 12:29 PM
If you have enough income to be able to live on 20% of it, then that is wonderful for you. That means that 80% of your income is disposable.

We have been in and out of debt several times and yes, debt is a horrible burden to carry. But I do wonder about people who give up everything to save money and then something happens to wipe out those savings and they have done without and have no reward at all.

We have had some lean times too, and with three kids in college, right now is very lean. But we hit a point where we realized that time was running out for us to do some of the things we had always dreamed of doing as a family with our kids. So yeah, we made a bunch of modest trips to WDW and this year we are going on our second family cruise. We try to get the most bang we can for our limited bucks. Our cruise this year will be costing around $500 a person, including tips, parking, and a snorkle trip. Could we use that $2500 in another way...well yes, but the chance to spend time with the kids and for the family to bond is important too.

ducklite
08-06-2006, 02:11 PM
We have friends who did something similar. He was a scientist at Bell Labs (now runs his own consutling firm) and she was a homemaker. They never had kids. They paid off their condo in about three years time. They live VERY frugally, have one car, seldom take vacations or eat out.

They have put away all they need for retirement (which will be in another few years) and have put three nieces and nephews through college.

Anne

Cindy B
08-06-2006, 03:01 PM
http://ca.pfinance.yahoo.com/ca_finance_loans/11/how-we-paid-off-our-house-in-three-years

.

There was also an article in MONEY this month about a family (with kids) who vowed to not buy anything new (with a couple of exceptions) for an entire year. Everything would have to come from thrift shops, flea markets, trash picking, hand-me-downs or borrowed. Again, an extreme route to go but evidence that living on a lot less than most of us currently do is very possible if you really set your mind to it.

There was a book called Not Buying it, which I think the Money magazine article was based on.

It was a couple (no kids) that lived on only bare necessities the entire year. I think they said they saved a boat load of money. (no movies, entertainment, etc.. only necessities grocery wise)

I remember one of the chapters being about what was determined a necessity for groceries or not. I think the discussion was if condiments were considered a necessity or not.

This couple also lived in NYC, so the transportation budget is much lower than anyone who doesn't live in a city with great public transport options.

mjbaby
08-06-2006, 03:09 PM
I believe in balance and the lifestyle of that couple in no way, shape or form represents healthy balance.


I agree. And, the author describes himself as having been a juvenile delinquant with addictive behaviors (to alcohol). What he describes in the article seems to me to be nothing more than addictive behavior transferred from one area to another. Now, the outcome was happier than with most addictions but I don't know if it's something I'd want to emulate as a lifestyle.

EthansMom
08-06-2006, 03:49 PM
Interesting article.

My first intinct was, "We couldn't get down to living THAT frugally!" (Meaning, put away 80% of our income.) But then I read later in this thread that house payments and other long-term savings counted towards that 80% figure. I did some quick calculations and we're currently putting roughly 50% of after-tax income toward "asset building" (retirement savings, college savings, saving cash for our next car, mortgage payments, and repayment of debt) Include DH's pre-tax 401k contributions and investments/savings made with "found" money and we're putting 60-70% toward increasing our net worth.

However, like other posters, we would not consider working long hours for weeks on end to be a life worth living. In fact, DH has been putting aside offers for career advancement for the last couple of years -- the higher pay isn't worth the higher stress and longer hours. DH would rather spend his time at home with the kids. Likewise, I put aside a well-paying professional career to stay at home with our kids full-time. If money was more of a priority than our family, we could be making twice as much money.

I think the thing that we can all take away from this article is that there is always some way to spend less money and if you spend less, you'll have more money to put away for later.

fakereadhed
08-06-2006, 03:54 PM
http://ca.pfinance.yahoo.com/ca_finance_loans/11/how-we-paid-off-our-house-in-three-years

For all those who think they couldn't possibly save anymore and there is no way to get ahead, here's a good story. These folks lived on the bare minimum and saved 80% of their pay. They bought and paid off a home in 3 years. Granted, they earned a substantial income, but they also worked their tails off to do so. Not everyone could be as extreme as this couple, but I think there are some good lessons there.

There was also an article in MONEY this month about a family (with kids) who vowed to not buy anything new (with a couple of exceptions) for an entire year. Everything would have to come from thrift shops, flea markets, trash picking, hand-me-downs or borrowed. Again, an extreme route to go but evidence that living on a lot less than most of us currently do is very possible if you really set your mind to it.

If we worked all the time, and were never home, and never had time to go to the store or run errands, we could save a bunch too. Definitely not the healthy way to go, though.

As far as the other family goes, it is definitely possible to reuse and recycle to save. It is hard on the kids if you go to extremes, though. For example DH has weird money issues because his dad did construction work and they were constantly being super frugal because they never knew if they would get a paycheck from week to week. As a little kid he got the message that money=happiness(security) and freaks out as an adult when he has to make any purchase over $10. I am frugal, but try to impress on the kids that it is a choice, not a cash crisis.

MrsPete
08-06-2006, 04:55 PM
I believe in balance and the lifestyle of that couple in no way, shape or form represents healthy balance. As another poster said, the time spent looking for bargains can put severe strain on family relationships.I agree that everyone needs balance in their lives; however, I don't think these people intend to live this way FOREVER. I think they did it for a couple years to get themselves into a secure financial position, then they will become more moderate in their spending. I think it's a wise choice.

gina2000
08-06-2006, 05:31 PM
I agree that everyone needs balance in their lives; however, I don't think these people intend to live this way FOREVER. I think they did it for a couple years to get themselves into a secure financial position, then they will become more moderate in their spending. I think it's a wise choice.

I will never think that their choice was wise unless it was also necessary. As mjbaby suggests, it's addictive behavior and any addiction can be problematic no matter how short or long the duration.