Living 'below' your means, tips, experiences?
June 3, 2014 7:51 AM Subscribe
How'd you make a long term mental transition to having lower income without going crazy or going into debt? Say you made more money before and then because of life goals (or worse) your income was very much reduced. How'd you prepare? How'd you go against the tendency to spend your money? In other words, how do you not stress about money when you are able to save more money than many people make in a year?
posted by sandmanwv to Work & Money (25 answers total) 70 users marked this as a favorite
My wife and I are very lucky/smart/etc to have very good incomes (~$200k/year combined) and I have a sizeable trust (enough to fund a child's college), which gives me a little psychological uneasiness.
We are fairly young (late 20s, early 30s) and pretty early in our careers. I'm pretty set about my career in a burgeoning field with good long term prospects. It's not a passion but I'm good at it, have great network, etc.
She's a young associate at a kind of high powered law firm, and doesn't want to work there more than a couple years (which I whole-heartedly support). Her long term plan is either something different or working at a lower salaried law job in non-profit or legal aid. In any case her long term income will be lower. We also look to travel/live abroad for a couple years, hopefully at a level where we break even financially.
We are not extravagant spenders on material goods- our cars are 10+ years old, do not buy expensive clothes etc, but we value living in walkable neighborhoods (so our home is locally expensive) and enjoying food and drink and travel. I've tracked every dollar spent and made since I have been working so I'm keenly aware where the money goes.
We are able to save about 10% of our income (and another 20% goes to 401ks), but I want to be able to be confident that when our income goes to just one income (or slightly more) or if we have kids, we can be able to not feel the pressure to dip into the trust fund to live our own lifestyle.
Tips on making the trust less 'accessible' (I'm in complete control of it) are good. Dipping into the trust to do anything other than pay for children's education or extreme emergencies is something I don't want to do as I feel like my (extremely thrifty, immigrant) parents didn't save their money so I could go live large. (giving the money to charity is probably off limits too) Thanks!
Also, I know very much how to spend less money (i.e. get rid of one car, sign up for credit cards for points, pay off cc balances, use airbnb) so the question is more about how to psychologically spend less money.