How Do You Afford Your Lifestyle??

We have been asked that question numerous times because although hubby is retirement age, I am a couple of decades away from traditional retirement age.  So when people see me and hubby always together they often wonder why I don't work and, more importantly, how we can both be retired.

I came across this video today from a guy who, with is wife, spends nearly all of his time hiking long trails.  Since they are both young, everyone wants to know how they can afford such a lifestyle when "normal" people work full time jobs for several decades before they can retire.

It comes down to lifestyle choices.  If we wanted to keep our previous lifestyle of a big house in a high cost of living area with two brand new cars in the driveway, a dozen maxed out credit cards, shopping at the mall daily, weekly mani/pedis, and buying everything we see just to keep up with our friends and co-workers, well, we would both be working until we die.

Nearly a decade ago, however, we found Dave Ramsey and decided to totally change our lifestyle and everything that went along with it.  We got out of debt, moved to a low cost of living area, bought a practically new house at nearly the bottom of the housing market at a cost of around one third of what we were pre-approved for through our mortgage company, shared one paid off car, stopped shopping anywhere but at the Goodwill, and basically gave up "keeping up with the Joneses".

We also had several things working in our favor, namely hubby's pension which saw us through the early years of our lifestyle change then later hubby's social security.  We are both covered by free (hubby) and super low cost (me) military health insurance.  We don't pay retail for anything.  We have been debt free except for the house and recently my one credit card which I am working diligently to pay off.  I decided to buy a new car because our old car was nearing twenty years old (and I figured it made more sense to buy one while I was still able to work if need be to pay it off) for which we got at a great price for a highly rated car that should last (hopefully) for a couple more decades. 

I have been fortunate to have had several sources of extra income throughout the last decade which has helped to buy nice extras (and is currently paying off the car) but much of our lifestyle has come down to making significant lifestyle changes and buying as little as possible.  When we do buy things we wait until the price of said item is highly discounted and then we pay cash for it.

So that's our story and living within (or well below) your means is a common thread for a lot of people who have embraced a frugal lifestyle from Amy Daczyczn to the Cash Cow Couple to several other people.

20 Ways I am "Living Like No One Else..."

One of Dave Ramsey's catch phrases is that you need to "live like no one else so that later you can live like no one else" meaning that if you want to be debt free, successful, and eventually rich, you can't be living like all of the "regular" people who are often broke and up to their eyeballs in debt. If you really cut back and make a concerted effort to be debt free, pretty soon you will be living the high life because you will have actual CASH to buy the things you want. Here's 20 ways I am "living like no one else":

1. We don't eat at restaurants unless we are traveling or it is a very special occasion. Before, we would eat out two or three times a day. Everyday. Yikes.
2. I can count the number of clothing items I bought in the last couple of months on one hand. I used to think I needed a new outfit nearly every day of the week (and I have the massive amount of credit card receipts to prove it!).
3. We haven't been to the movies in...I can't remember how long. Ditto with video rentals. With hundreds of stations on TV, I can be patient until movies come out on cable.
4. No more subscriptions! I used to subscribe to magazines, newspapers, the gym...having a steady amount of money being pulled out of my account monthly for things I may or may not even use was a waste of money.
5. I don't own a car! This simple change in my life made the biggest positive financial impact on my life ever. I wish I would have known about this 25 years ago--I would probably be a millionaire by now!
6. I don't have/use credit cards any more. Again, if I would have known how much money I could have saved over the years by spending cash only I would have been a millionaire (again!).
7. I don't take all of the travel opportunities that come along, unfortunately. I love to travel but since I am using cash only and we are paying down debts, I have to control myself and decline all of the great vacations that family and friends invite us to (Las Vegas and Hawaii this month). Unfortunately I will be sitting at home paying off our debts...
8. No more designer purses and shoes. This is sad and I love designer purses and shoes but I just can't see spending $500 on ONE ITEM that I will use for a while then sell on eBay for a fraction of the price I paid for it.
9. No smart phone. I am also sad about this because EVERYONE has a smart phone that provides internet, music, games, and lots of fun stuff at their fingertips but I just can not justify spending twice the rate for a smart phone plan compared to the basic plan for my regular cell phone (not to mention the cost of the new smart phone itself).
10. We haven't been dancing in ages. From the age of 21 (actually 16 if I could get in without being carded) until about 38, we were in nightclubs nearly five days a WEEK! I love to dance but the cost of clothes, food, drinks (soda for the hubby and I since we don't drink so this wasn't a major cost for us) gas to get to the club, etc. was just huge when I look back and calculate how much we spent on this expensive hobby over the years.
11. Random shopping. Many of my friends still shop a lot. Every time we go to a store, gift shop, or anywhere else that has a retail section, they feel like they need to buy something...anything. I am now just the opposite. I simply don't buy stuff on the spur of the moment anymore. If the item I am looking to buy hasn't been on my "need to buy" list for a while, I don't buy it. Trinkets are never on my "need to buy" list.
12. We look at every bill and figure ways to cut it down. Cable=number of stations reduced. Garbage=reduced to twice a month collection. Auto insurance=reduced to liability only. You get the idea.
13. No daily Starbucks runs. Actually I haven't had caffeine in quite a while but I do occasionally treat myself to a green tea frap but this isn't the daily/twice daily occurrence that it used to be.
14. I take public transportation. It is much cheaper and pretty convenient and allows me to get a bit of exercise walking to/from the bus.
15. I don't give people money any more. Friends and family used to hit me up for cash for everything from covering a cell bill to making a car payment just before their car gets repoed. The thing I learned, however, is that giving people money (or "loaning" it to them and never getting paid back) didn't actually help them. Two months later, they would be asking for money again for the very same thing!
16. No more services for our home. We used to have a housekeeper and a gardener which I felt we "deserved" because we worked so hard (plus all of our friends had housekeepers and gardeners and we didn't want to be "different"). These days hubby and I share the house cleaning and lawn mowing chores.
17. Gifts have been ratcheted WAY back. I used to buy gifts for all occasions for all friends and family (like a hundred people--we have a big family). Not only was this a big expense, but sometimes people wouldn't even say "thank you".
18. Technology is nice but we don't need/want "the best". During the high-rolling '90s, I had to have every new technological item nearly the day it came on the market. These days I will wait and let both the bugs be worked out and the price to drop low enough that I can justify buying it.
19. We don't fall for things designed to separate us from our money. Multi-level marketing programs, time shares, boats, etc. If something has a price attached, we almost always decline because we are so much more aware of our money and simply won't let one dollar get out of our grasp because we realize there may be no opportunity to "pay for it later" and the social pressure to buy to "be like...and be liked...by everyone else" is now non existent. If people don't like me the way I am...I DON'T CARE. I care about my financial stability and financial future.
20. Overall our concept of money has changed drastically. We no longer spend like maniacs, charge stuff we can't afford, or think that budget is a bad word. Now, like Dave says, each dollar we earn has a name and a purpose before we even get our paychecks.

I can't wait until the day I can "live like everyone else". Of course I will blog about it here too!