This reader story comes from Paul. Some reader stories contain general advice; others are examples of how a GRS reader achieved financial success or failure. These stories feature folks with all levels of financial maturity and income. Want to submit your own reader story? Here’s how.

I’ve always had what I term a “fluid budget”; that is, I always make sure I have more money coming in than going out and I don’t track every penny (though I have a good idea where everything is going). I’ve never made more than $40,000 a year in my lifetime (I’m 34), but I have always worked from the time I was twelve years old. I can also honestly say I’ve never spent more than I’ve earned, thanks to a father who viewed debt as a kind of slavery. Looking back, I’m grateful for this somewhat extreme worldview, as it forced me to be resourceful.

Saving is a priority for me because I was raised to believe that money gives you options and not having money means not having options. This could be the option to choose a different job if needed, take a vacation, buy in bulk when it is cost-effective, and allow my wife and I not to have to fight about every expense or stress about purchases. I don’t know about you, but I like having options.

I was grateful that, when my wife and I got married four years ago, she was willing to adopt a more financially mindful lifestyle. (She was a bit of a spender.) I, in turn, have learned to loosen the reins over time to allow for some more relaxed spending. I think we’ve found a healthy balance and thankfully we don’t fight about money too much (which is worth its weight in gold). We don’t feel deprived or that we are extreme cheapskates, though some things might seem extreme (a matter of perspective if you ask me).

Here are some examples of how we try to cut expenses and live within our means:

  • We use rags instead of paper towels in the kitchen.
  • We use a bidet attachment (pretty standard in Europe and Asia, though we are American and it’s basically unheard of here), which saves money on toilet paper and is more hygienic. (We still have toilet paper for guests.)
  • I bought a $20 clipper set and started cutting my own hair and my children’s hair recently. It’s easier than I thought, saves me the hassle of going to the barbershop, and doesn’t look bad either!
  • We hang our laundry out to dry and make our own laundry soap. Takes five minutes for each.
  • Even though we live in a townhouse, we have a small garden that produces fresh produce for the summer (tomatoes, eggplant, peppers, cucumbers, zucchini, strawberries, lettuce, and herbs). Gardening is a relaxing hobby for me, not work.
  • We get books and DVDs from the library. We don’t have cable (though we do have a Netflix subscription that is $8 a month)
  • We don’t eat a lot of meat. Instead, we make lots of dried beans/legumes and lentils, rice, pasta, grains, frozen veggies. I bake bread. I feel that we eat well and balanced.
  • I try to shop for clothes infrequently and, when I do, it’s often at Goodwill. Generous friends have given us lots of hand-me-downs for the kids.
  • I get snacks at the Dollar Store.
  • I try to bike to work a few days a week to save on gas and wear and tear on the car, and get some exercise and free endorphins. It is 35 miles round trip, but I have an electric assist which keeps me from arriving all sweaty or too tired.
  • We bought our cars used on Craigslist and paid cash. They are ten years old but are reliable (Toyota and Subaru) with low miles when we bought them, and are good on gas.
  • We don’t tithe 10 percent of our earnings, per se, but we do contribute financially to our church and to those in need.

A lot of these money-saving tactics have been added gradually over time, not all at once. Sites like GetRichSlowly have been great for learning the tricks of the trade from people with similar financial goals.

As for expenses, here is a breakdown of what is going out each month for our family of four:

  • Mortgage/taxes/insurance: $1,130
  • Daycare: $1,560
  • Water/Sewer: $36
  • Cell/DSL/home phone: $180
  • Car insurance (2 cars): $128
  • Car maintenance/registration (average): $30
  • Gas: $200
  • Charitable Giving: $200
  • Groceries: $400
  • Utilities: $110 (average)
  • Diapers: $90
  • Health Insurance (through our jobs): $290
  • Dog food/vet: $35
  • Misc: $400

Based on our income, I have calculated our savings rate to be about 40 percent after expenses.

A couple notes:

  • We pay off our credit cards in full every month.
  • We do not have student loans. My parents paid for college (though I graduated in 3 1/2 years from a state school and also received scholarships). I worked my way through grad school, taking one course a semester and paying as I went. My wife earned her BSN at a state school which her parents paid for.
  • We have been prepaying our mortgage for the past few years pretty aggressively. We are set to pay it off by the end of the year on my wife’s 40th birthday. We live in a modest townhouse in an urban area. Our interest rate at present is 5 percent.
  • Living in a 1,100 square foot house means our utilities are relatively low, we have no lawn maintenance, and housing repairs at this point are minimal and manageable. We have no homeowners association fees.
  • We have no other debts.
  • Our jobs are relatively secure.
  • I contribute $300 per month to my employee pension plan and also max out my Roth IRA. My wife contributes about $500 a month to her retirement plan through work.
  • We have a healthy emergency fund and are looking toward learning more about investing once the house is paid off.
  • Daycare expenses will phase out in a couple years. Schooling for our children is the big issue at this point, or at least it will be in a couple years. The public schools in our area are not an option, and private schools are somewhat pricey. We are leaning toward homeschooling, which is why we are saving so aggressively and planning to pay off the house this year, so that my wife might be able to cut back to part-time work. I would love to hear from anyone who has gone this route, and if it has been a worthwhile endeavor.

Shifts in perspective have been helpful for recognizing the richness of our life (even though we are not, by any means, rich in the normal sense of the word) — that is, focusing on what we have, not what we don’t have. We have hot water on demand whenever we want it, our roof doesn’t leak, and both of our children have their own bedrooms. We have never gone hungry. We have personal vehicles to take us wherever we want to go, whenever we want. We are in good health and have family nearby. We are both gainfully employed. We enjoy things like walks in the park and ice cream cones and time together as a family. We are able to give to those in need.

The other thing that has been helpful whenever the temptation toward spending our hard-earned money presents itself is to remind ourselves that doing so is borrowing from our future selves. It takes time and practice to develop good financial habits; but the thought that doing so is benefiting our future selves keeps us going, one dollar at a time.

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