While we’re not living WAY below our means,
we’ve been slowly but surely chipping away at our debt, lowering our debt payment obligations, and thus learning to live below our means.
If you remember a year ago, when I was doing budget updates, we were stretched so thin. We were both working, but we had so much debt we could barely make the minimum payments each month. This month, we’re paying off our personal loan – freeing up $500 a month!
While that’s awesome, and it seems like we should be able to put $500 towards our debt snowball,
that’s not the case.
Part of being and adult and making smart choices is taking $100 of that payment we no longer have to make and putting it in savings each month, since our savings were put on hold. It also means taking $130 of that and putting it in savings each month to pay our car insurance when it comes due, leaving us with only $270 to put towards our debt avalanche.
But as sad as that is that we can’t put the whole $500 towards debt, paying off that personal loan and living below our means for the first time in years has tons of advantages!
Less Stress:
While I have no desire to bend or break our budget, it is gives me a lot of peace of mind to know that we have wiggle room if something were to go wrong, or some emergency come up.
No longer do I have to plan out a month’s worth of paychecks, bills, and the associated cash flow. Sure, I keep an eye on our bills so I make sure we’re covered, but the process isn’t nearly as detailed, time-consuming, or STRESSFUL as it was before.
I Feel the Pride of Ownership
I read an anology once about money. Basically, it said that each and every dollar that you save or invest is like an employee, going to work every day, making more money for me! I can’t take credit for the analogy, and for the last year I haven’t totally known how that felt, but I do now.
We’re starting to put money in savings again, and I love the feeling! I have hundreds of employees providing me with passive income! Literally, I smile when I log into Mint.com :-)
Wealth Accumulation:
Along the same lines of pride of ownership, wealth accumulation is an amazing thing. I know that $100 a month seems small, but when you look at it on a larger scale, $100 a month has a huge impact. Such a huge impact, in fact, that $100 a month for 40 years will grow into a bit more than $270,000. My $100 a month doesn’t seem so shabby now, does it?
Brighter Financial Outlook
Now that I have moved past my disappointment of only being able to put an extra $270 extra towards debt, and I know that I have lowered our expenses as low as we can without going crazy, I can focus on increasing our income.
Personally, I love blogging, but there are always things like surveys, writing freelance articles, and secret shopping! And yes, while it does sound like more work to earn more money (and you’d be right) it brightens my financial outlook because I have the power to change it! I’ve already helped our situation so much, and I can do more!
Giving More
Giving, both to charity and to our church has been a priority we just could not afford. Now that we’re living below our means we can afford to give (a little) again!
Career Options
As I said before, I recently took a promotion that was in title only. In fact, I’m making a little less money, but working less hours, on things I’m more interested in, as well as having the option to work from home occasionally. Were we not paying off our personal loan in Novebmer, I would not have been able to take that promotion that helped my happiness. Also as a result of the promotion, I will be eligible for another (this time with more money) promotion!
Self-Confidence
I used to dread budget updates. I dreaded even the most constructive criticism when I published them because I was impatient to make drastic changes to our debt and our cost of living. Now, even though we have a long way to go, I am starting to feel good about our budget!
You (and only you) decide your future:
When you live below your means, you have the ability to pursue your passions. I am discovering this – in fact, I just took a title promotion that allowed me to work less, work from home if I wish, and gave me a salary (as opposed to hourly). However, the salary just slightly less than what I was making before.
As a result, I am much happier! I have more time to devote to family, my health, and my passion: blogging!
Ability to Increase Your Income:
Part of my passion for blogging is creating a revenue-earning business from nothing. Each time I sign a new deal, or receive a check for advertising I feel a sense of pride. Not only is it amazing to me that people come back over and again to read what I’m writing – I can make money from it!
Of course, there are many more reasons to live below your means then I could physically cover here – and everyone’s reasons are different.
So tell me: What are your reasons for living below your means?
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Brooke says
So glad you have flexibility now that you are living below your means! Congratulations on paying that personal loan off!
Mrs. Bug says
That’s wonderful that your new position offers you flexibility to work from home. My reason to live below my means is so I can save more in order to retire early from traditional work and travel the world and spend more time with family.
Nichole @Budget Loving Military Wife says
How exciting! Congrats on paying off your personal loan!
We live below our means so we can travel, pay off our mortgage, and save for retirement! :)
Sarah says
We live below our means, too. While it can be tempting to want to upgrade our lives and purchase more stuff, it’s not worth it at all. Stuff only provides temporary happiness! I love being able to walk through stores knowing that I can afford anything I want, but I’m choosing not to buy it.
We live below our means because we are saving for a large down payment on a house, we want to retire early and – most importantly – we want to spend time with our kids instead of spending all our time working. Living below your means gives you much more freedom than being trapped by bills!
Leslie says
I’ve pinned this post too. You’ve got some great tips so i’m going to follow you on Google+ too.
Susan says
Congrats on your promotion (and future promotion). We also live below our means and don’t feel like we’re missing out on anything. In fact we now have the ability to do anything we want because we’re not wasting time and money on all those things we only thought we wanted but we’re really worth it Congrats, you’re featured this week at the Inspire Us Thursday Link Party on Organized 31.
Carrie This Home says
These are such great ideas on why it’s good to live within your means. Sometimes just being content with what you have (even if it’s just a $100 or less) is worth more than a million bucks!
Thank you so much for sharing this at the Frugal Crafty Home Blog Hop. I’ll be featuring this post at our next party!
Heather @ My Overflowing Cup says
We are attempting to live below our means for many of the reasons you listed. Also, our income has been greatly reduced as well as become unreliable. This forces us to be very intentional because we can no longer rely on a set amount. Because of that, we would love to pay off our mortgage so things aren’t as tight each month. I love the analogy of our dollars being employees. Thanks for sharing that with us.
Vickie says
Love that your working on living on less. We have been living below our means for many years to stay retired! We both retired in our late forties and want to stay that way!
Rebecca @ Livewellthirivemore says
While I know how fortunate we are now, We did have debt for the first year of our marriage for a car, and it was rough even tho our payments weren’t high I hated owing someone for an item that was mine. We figured that my husbands income at the time could JUST get us by on our monthly bills and expenses, so my entire income went to paying off the car, anything extra, and building our emergency fund up then moving on to other savings. Right now we are saving for a house, but it also is giving me the chance to pick a job with less hours if I want because we don’t have debt to hold me to a job that might be undesirable in the future just because we need the money! Debt is dumb!
Sandy / www.frugalable.wordpress.com says
Gretchen I feel like we have similar goals. I even read your intro “wife, mother, chocaholic & struggling runner” and thought OMG this girl is me! LOL. Its such a great feeling to get to that point where money isn’t a stress trigger anymore. Like you, I have made changes in my lifestyle to live below means and it is such a nice feeling to not be controlled by money and possessions. Great work!