Is it possible to live within your means? Why would you even want to try?
Living within your means is a nice idea, right? Like staying married to one person your whole life, or working thirty years for the same company, or being able to fit into your old uniform at your fortieth reunion. Nice, grandma-approved ideas, all of them. They worked fine for her generation. And for most of the generations before them, honestly.
Eric and I want to live within our means, we really do. And we’re mostly successful at it, if you take a broad, modern-day approach to the idea. If you take my step-grandmother’s approach, we’re sort of huge failures.
This is what I mean:
Yes, we have a mortgage. We borrowed money to buy this house because we didn’t have $140,000 in the bank to buy it outright. We could have bought a cheaper house but we didn’t have $90,000 or $40,000 or even $10,000 in the bank, either. And if we hadn’t bought a house, we’d be paying the same amount in rent (for a far less pleasant living situation).
However, when we bought this house we crunched the numbers mercilessly to make sure we could afford not only the mortgage, but everything else that goes with the house:
- utilities: heat, electric, garbage, water, HOA fees, internet, etc
- distance to our jobs: car maintenance, gas, etc.
- exterior stuff: gas for the lawnmower, a lawnmower, landscaping supplies
- interior stuff: curtains (America! Stop using blankets as curtains! It hurts my friggin’ eyes!), furniture, etc.
This is important, because we’ve seen some friends who’ve forgotten about all the extra stuff, and it’s a huge shock when a person realizes a propane tank can cost $800 to fill, several times a winter.
We have about the same story here. We do borrow for cars, almost every time we buy one. But we stay away from the $50,000 land yachts and head for the $10,000 used section of the lot. Eric spends (literally) months researching each option until he’s happy with the engines, the frames, the recall notices, everything.
AND I MEAN EVERYTHING. And then we buy the car. To date we’ve paid off every vehicle loan years ahead of schedule.
Moment of transparency: As of this writing, we’re seriously considering buying a brand new car. We’ve never done that before. But we like the idea of buying something with no mileage on it, then taking excellent care of it, and driving it for a decade or two.
Once again, we borrowed. We could have done a lot better, but we could have done a lot worse, too. I left school with about $8,000 total in debt, and Eric graduated two years later with $22,000. Because we soon had babies and a mortgage, it took us the full ten years to pay Eric’s loan back. This grieves me still. But honestly, there are only so many ways you can spread the resources in early family life.
But compared to today’s graduates who are leaving with over a $100K in college debt and then finding jobs that pay the same amount Eric and I made at our first jobs, we had it easy. I am not at all comfortable with the automatic assumption that going to an expensive four-year school is the best way for most students.
I’d be a lot more comfortable if these kids were forced to do a mock budget for a $30,000 salary that includes a $700 monthly student loan payment.
This is where Eric and I don’t do too badly. We track every penny, and I mean that. Thanks to budgeting software we can tell when we’ve overspent in our grocery, eating out, or gift budgets.
We’ve been married for eighteen years, and I can tell you this– it’s a combination of the very large purchases and the everyday stuff that keeps you living within your means.
Obviously, if w’ere going to go with the old definition (and probably the wisest definition), most of us probably don’t live within our means. If we did, we’d be living with our parents and walking to work until we had enough saved for a house and vehicle.
But if you use the broader definition, I think most of us could make it. If we’re able to save wisely and give generously each month, pay our bills, and then add in a few wants, I think we’re on track. It’s not easy, even with the looser definition of the term. But it’s possible with some planning and discipline.
Here are some of my favorite resources for helping me stay on track. I hope you find them helpful!
- frugalwoods.com: The Frugalwoods have an amazing challenge going on in January of 2017! You’re going to be living within your means by February, if they have anything to say about it.
- daveramsey.com: The ultimate king of debt-free living isn’t going to take your excuses. Rice and beans, beans and rice, until your debt is gone. Amen.
- hisandhermoney.com: Tai and Talaat will have you cutting your expenses or growing your income with their podcast and blog.