How To Live Below Your Means 1-10

Tue, 25 Nov 2008 18:59:23 -0800

Below you will find 30 Ways to live the life below your means.

We live in the society that promotes debt, waste and greed. Competition and style are the idols of today’s America. I would like to share with you some ways of living below the means. After all, material things will never make us happy.

It is human touch, laughing, eye contact, love and times spend together that makes one happy. One does not need to impress the peers to stay happy. It is a trap for one’s existence.

Steven Pressfield in the book “Tides of War” has a great line where someone asks Socrates what freedom is and he responds that the freedom is :
1.) a will
and
2.) the force to exercise that will.

Then, he goes into example describing guys that sit around the fire tyrannized by the opinion of their peer’s and their inability to possess freedom. Sounds like me… My car is not as new as yours… My phone is not as cool as yours…..

I say that we accept ourselves the way we are and stop following illusory images that society conveys today. You can live the life you want and not what others want you to live. After all, life is a precious gift and the free choice of the way one should live the life should be one’s choice.

Do not let external forces (media, school, and peers) to influence your mind and decisions. Forget about quick fixes. If somebody tells you that you need diet pills to lose wait, I say, watch your diet and exercise more.

You should work with the reason instead of curing symptoms.
If you cure the cause, the problem is gone. If you treat symptoms, you will be hooked with pharmaceutical companies.
And yes, they want that – you are a revenue generator for them.

So here is ways to live the life below your means

1. Opt Out of Credit Cards

Try to use cash whenever possible. Credit is money you do not have. Credit card companies want you to use their services because they will charge interest and they get commission for each swipe as well.

You have to change behavioral pattern and try to spend the money that you have – cash.

If you have a temptation to use credit cards, consider opting out of offers.
If you are in debt, pay off the highest interest cards and cancel them once you done with the payment. Leave one credit card for emergencies until you create an emergency fund, preferably the one that gives you cash back.

2. Do Not Pay Retail

You can always find the product cheaper online. Do your homework on the web before choosing the best bargain. G1 – Google phone that was introduced in October 2008 has a feature that allows you to scan the bar code and find the same item everywhere including retail locations and on the web. You do not have to buy Google phone and pay a premium for a service. Just search online for an item you want to buy. For instance, in my office we get staples from Office Depot for $4.89 per box. I was able to find it for $0.89 online. This is FIVE times cheaper. It saved our office a lot of money this way.

3. Stop Junk Mail

I often catch myself going to Big Lots to buy something because I received the flier and it is so cheap. Stop Junk Mail if you can not hold yourself from impulsive shopping. I created the page devoted to Junk Mail and it feels good to check mail twice a month now.

4. Buy a New Car With Cash

While it is cool to drive the car that is brand new, you lose 30% as soon as you drive off the lot. That is a lot of money to be saved. Buy used vehicle. Try to pay cash for it. Car note is more expensive and you will end up paying much more for a car at the end. Buy the car from current owner rather then going to the dealer. If you can afford only the car that costs 7,000, buy only within this price range. (Going even further, spend 6,000 and create an emergence fund with another 1000).

You have to remember, the car has to get you from point A to point B.

5. Do Not Refinance Your House

Mortgage brokers are all about low rates and “great savings” but consider the following. Bank wants you to refinance because they will be earning interest. Mortgage broker will make money - spread on the interest.

For instance, once you buy a house and your mortgage is $400, only $20 will go towards the principle and $380 towards the interest. So at the beginning of your ownership you will be paying mostly interest while principle loan amount will stay the same way.

So, it is better for a bank if you keep refinancing or moving every five years because they will make money. So, do not move or refinance, unless the refinancing rate is much cheaper then your current rate and you planning to live in the house for at least 10 years.

Another tip, add extra $100 to your monthly mortgage payment specifying towards the principle. You will be surprised how quickly you can pay off your house. (Adding $100 a month extra will let you pay your house in 22 years instead of 30. It is big difference. Also, you will save about $10,000 on interest.

6. Avoid Restaurants

It is impressive to see how much money is wasted in the restaurants. Me and my friend went to the restaurant another day and ordered chicken. The tab was $35 dollars with tips. I could have the whole chicken from Publix for $7 and it would be enough for 2 people. Spend some time in the grocery store and plan your dinner accordingly, so you do not have to pay premium.

7. Become Spiritually Rich

The definition of being rich is in need of reconsideration. Spend some time with your kid instead of buying him or her Play Station or an X Box. You can not purchase love. Rather then thinking that you are rich and can purchase a new toy for your son or daughter, spend some quality time with them and simply talk and find out how they are doing. This time can not be substituted for any materialistic rewards that we tend to use as "quick fixes" nowadays.

8. Limit Advertisements

Ads will tell you that you suck and you need: brand new car, better cell phone, diet pills, improved formula for your hair, to eat - because Wendy’s is open late, repair your credit, buy the identity theft protection and many other things in order to be happy. Well, fundamentally, state of happiness is either here or not. Remember, you can not purchase happiness. Be Happy right now.

What I have done to limit advertisements is I listen to CD’s in my car (no radio), however I had to buy a new car - 2001 Ford Taurus for $3,000 cash from the local auction and id does not have CD payer.
As soon as commercial comes on the radio, I turn it off.

Reduce the amount of spending in front of the Tube. You can read more how I stopped watching TV.

9. Buy Only What You Need

I came across some interesting statistics that average American buys 100 things and 99 of them end up in trash within first six month. Do not buy accessories (car chargers, phone cases), new clothes (check your closet, instead of donating to Goodwill. Use it, why to spend more money?), new gadgets (old ones are still fine).

10. Stop Being Consumer

Instead of consuming, use as much as you need but nothing above your basic needs. Do you really need this 72 inch LCD screen? Probably not. Remember that your friends will be impressed only once, after that you will have to stick with it and see your electrical bill going up.

The holiday season is a vivid example how everything is made to spend money. Every holiday is about buying. Mothers Day - have top buy something for mother. Father’s day – for father. Christmas – for everyone, etc.
Do you need that big SUV ? May be not.

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