Tips on Living Below Your Means
Posted on | March 14, 2010 | 4 Comments
I saw this on the net – Getting Rich Slowly, and decided to post it here. I always doff my hat for anyone I meet that beats me in frugality, and try to learn a thing or two. A whole lot of our monthly expenses are unnecessary, if you are trying hard to save for a purpose. Cutting costs is easier said than done, especially when your definition of cutting costs differs from your spouse’s. I tried severally to give the expensive DSTV decoder a red card, but my wife was like – over her dead body. The idea is not to live miserably in order to save money. It is to delay gratification for a season, so that you can live in plenty in the years ahead. Enjoy…
Financial freedom means peace of mind in the financial sense only. To be able to correct situations that may need quick finances in order to accomplish a closure without stress. Buying a new HVAC unit for a house or purchasing a car in cash because your current one just died or is about to. The ability to stay out of debt, when a big ticket item is needed. Make interest off others while you pay no interest to others. Your money will balloon incredibly no matter how much you make as long as you stay within your means or mostly under your means. You have to sacrifice. While others are spending around you ignore it.
I have been able to do all these things and much more within an eleven year period making good decisions on where to put money, and how to use it. I paid my first house off 5 years ago within 6 years into the mortgage and still had over 6 figures in the bank. Within 4 years, I was able to triple that amount in order to buy another house, car in cash and new furniture in cash for a new house, which is a 6 Bed 5 Bath house. Do I need that size no, but I worked hard to save for it.
To tell you the truth, I really wasn’t saving for anything except retirement. My family had no idea I was this financially well off. They still don’t believe me even though they have seen my new house. My other house was kind of in a mid to lower class neighborhood and was 23 years old. When my HVAC went in that house, I was able to replace it with ease and still go on a fourth of July vacation without worries. I do have a lease/purchase agreement on my old house, so I am making rent off that house, but since I have no mortgage on that house, it’s pure money in pocket. I had put a very large amount down for my new house, so the rent I am making on my old house is paying for most the monthly payments on my new house.
In the mean time, I am still saving a good amount of money. Once the older house is sold in 3 months, I will be mortgage free once again in a house twice the size. A 30 year mortgage paid in 1 ½ years. I don’t understand why people with millions have any debt at all. They can buy that million dollar home in cash but buy it a little smaller. I know I am very fortunate to be able to do all this at a young age, but I made sacrifices in order to get there.
|
|
The thing is I did all of this by my mid 30’s without making 6 figures a year. Making well decisions on what to buy and how to handle socializing, gifts and low risk investments. I did not lose a lot in the stock crash because of this. I don’t drink coffee wasting 5 bucks a day. How did Starbucks flourish anyway! I never even walked into a Starbucks.
I don’t drive fancy cars. I had a non/HD tube TV for years. My first remote control TV came from a thrift store for 35 bucks 9 years ago. It lasted 5 years. The TV before that had knobs. It’s not that I couldn’t afford that 5G big screen; it’s just I thought it was a waste of money. I don’t have a cell phone nor do I have cable. I get 23 channels over the air HD for free. Yes I upgraded my old TV to a 50” Plasma for under 900 bucks new. Again waiting for prices to come down. I got ATT DSL for 2.5 years for 9.99 a month. Cheaper than my analog modem was! Yes, I ran that till the bitter end.
If you can hold out from gratifications and turn your head from the Joneses, you will eventually put them to shame. People are moving down that have been living it up all these years, and I have moved up. Most people on my new block are driving Lexus’s, BMW’s, and Cadillac’s. I am sure they are all leasing and/or have a loan. I bought a Nissan Versa in cash. I could afford a BMW in cash but why. No matter what kind of car you buy, the minute you drive out of the parking lot, you mind as well throw 2G or more out the window. Cars are needed but are a BIG waste of money. I will keep mine up to 15 years or more without any car payments just maintenance. By the way it has no bells and whistles. I have to roll down the windows and lock the doors by hand. It’s well worth it, since I got it for so cheap new. Also and less gadgets to break down.
This is financial freedom. It’s just most people do not realize how to get there. It’s amazing once you do. The feeling is like you are living at home with your parents again and not having to worry as a kid what was going on with the mortgage or anything else financially. Thinking that no one can take away your house, cars and possessions, since no one owns them except you. Knowing that in “Bad” times, that you can keep going with the lifestyle you have created for yourself and reap some of the benefits of falling prices/discounts because you have the cash. It’s all about being frugal, making smart decisions, and sacrifice. Slow and steady wins the race!
|
|
|
Related posts:
Comments
4 Responses to “Tips on Living Below Your Means”
Leave a Reply
Latest Posts
Newsletter Subscription
Categories
Popular Posts
Sorry. No data so far.
April 5th, 2010 @ 2:04 am
My cousin recommended this blog and she was totally right keep up the fantastic work!
April 8th, 2010 @ 1:24 pm
Keep posting stuff like this i really like it
August 29th, 2010 @ 11:11 pm
Insightful reading.
May 2nd, 2011 @ 3:49 pm
Thankyou. Keep reminding me. GBU.